Harbor Mid Cap Value Fund on Regeneron Pharmaceuticals
Thesis
The fund added to Regeneron because the stock ranked highly on cash flow and forecast earnings measures, two of LSV's most important valuation factors. Management has been repurchasing shares, which the fund views favorably despite a below-average dividend. Twelve-month price momentum remained strong. Operating fundamentals were also improving through better margins and sales growth, placing Regeneron in the top 10% of LSV's stock-ranking universe.
“Overall, the stock ranks in the top 10% in our stock-ranking universe, which led to the second quarter purchase.”
Key risks
- The investment case depends on continued improvement in operating margins and sales.
- A deterioration in valuation or momentum rankings could reduce the stock's attractiveness under the fund's quantitative process.