Lemelson Capital Management CIO Discusses Ligand Pharmaceuticals Prior To Company Issuing Weak Guidance

Ligand Pharmaceuticals Inc. LGND reported on Tuesday it expects its fiscal 2015 earnings per share to be in a range of $2.14 to $2.18, falling short of the consensus estimate of $2.42. The company expects fiscal 2015 sales to be $81 million to $83 million, also below the consensus estimate of $91.9 million.

Lemelson Capital Management holds a short position in Ligand Pharmaceuticals and the firm's Chief Investment Officer Fr. Emmanuel Lemelson spoke to Benzinga on Tuesday morning's #PreMarket Prep before Ligand's guidance release.

Lemelson is sticking with his original short thesis that shares have zero intrinsic value. The investment manager did confirm with Benzinga that his firm covered the majority of its short position at around $43 per share, yielding an approximate 40 percent return.

Lemelson said that he prefers to initiate positions on the long-side where many opportunities have presented itself over the past few months. One of these opportunities was a 2 percent stake in Geospace Technologies GEOS, which was announced on October 21.

Shares of Ligand Pharmaceuticals were trading lower by more than 4 percent at $54.57 Tuesday afternoon.