Drugmaker's $15 Billion Rally in 11 Days Attracts New Bear Call

(Bloomberg) -- After a 57 percent stock rally in 11 trading days this year, one analyst has decided that now is the time to give South Korea’s Celltrion Inc. a sell rating.

Nomura Securities Co. analyst Cara Song initiated coverage on both Celltrion and Celltrion Healthcare Co. in a report dated Jan. 16, recommending investors sell the stocks as both have been trading at a “significant premium” to their five-year historical average price-to-earnings ratio compared to their peers.

Incheon-based Celltrion’s rally nudged past Hyundai Motor Co., South Korea’s largest automaker, to become the third-biggest company by value on the country’s stock exchange after it launched a new drug for treating blood cancer in Europe last year and as South Korea’s Financial Services Commission introduced measures to drum up support for small-caps.

Celltrion’s market cap added $15 billion this year as it rallied to a record high on Jan. 15. It slipped about 1 percent Wednesday.

This isn’t the first time Song has taken a contrarian view on South Korean stocks. A couple of weeks ago, she published a report recommending that investors put their money in the nation’s benchmark equity index instead of cosmetic stocks as Chinese tourist arrivals won’t be as high as what the street expects.

To contact the reporter on this story: Divya Balji in Singapore at dbalji1@bloomberg.net.

To contact the editors responsible for this story: Chris Nagi at chrisnagi@bloomberg.net, Teo Chian Wei

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