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Wednesday, July 12, 2006

Most Widely Traded 48 Hour Clock: Genentech Takes A Dive

24/7 Wall St. has begun coverage of the 36 most widely traded stocks, eighteen each from the NYSE and the NASDAQ. Most of these stocks trade over 50 million shares a week. This new feature will highlight each of the 36 stocks at least every 48 hours giving investors fresh infomation and perspective on the companies whose shares are most likely to move the broader markets.

Genentech (DNA) proves that you can do everything right, but on Wall Street, in a market moving down day-by-day, it is not enough,

The black market for the big biotech was that one of its new drugs missed sales forecasts by $16 million according to an Reuters story quoting brokerage Robert Baird & Company. Otherwise, quarterly net income rose 79% to $531 million. Revenue was up 42% to $2.2 billion. Vitually every one of the company's top seven drugs showed sales increases: Rituxan, Avastin, Herceptin, Tarceva, Nutropin products, Xolair, and Thrombolytics.

Genentech's shares are now downright cheap. The stock hit $100 in December of last year, and now trades at about $81. So, how explain the nearly 20% drop. It's hard to.

Genentech has had five straight quarters of strong revenue growth. The company is on track to do over $8 billion this year, up from $6.6 billion in 2005.

The market may be concerned over the sales of one drug in the company's line, but that misses the point.

Douglas A. McIntyre can be reached at He does not own securities in companies he writes about.

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