Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
If you believe that 54.5 percent of the royalty stream is worth at least $174 as of 6/30, the remaining unemcumbered 45.5 is worth at least $145.
The company will have $84MM less cash at the end of the deal than if they had not done the deal.
A bit simplistic. The Company invested the cash in Treasury securities bearing interest or will otherwise deploy it to generate a return, so the net cost (or benefit) is the difference.
Glad we now agree :)
cash on hand to cover that burn after the transaction
It artificially suppresses the share price and over time this debt gets written down simply by transferring a portion of the royalty to the creditor without drawdown from cash on hand
excluding balance-sheet “debt” relating to ENTA’s deferred-royalty obligations, which is a GAAP artifact rather than an actual debt instrument.*
TGTX raises guidance - https://finance.yahoo.com/news/tg-therapeutics-reports-second-quarter-110000878.html
Is an addition to the MicroCap index - https://www.lseg.com/content/dam/ftse-russell/en_us/documents/other/rmicro-additions-preliminary-20240524.pdf
Not included in deletions at least - https://www.lseg.com/content/dam/ftse-russell/en_us/documents/other/ru3000-deletions-preliminary-20240524.pdf
Tomorrow id Russell reconstitution day announcement. There is an outside chance that RVNC will be dropped from the 3000. If that happens, watch out below. That may be the reason for the latest weakness.
Barron's thinks that it is robbing Peter to pay Paul:
https://www.barrons.com/articles/3m-cleveland-cliffs-buyback-dividends-c646c1d3?siteid=yhoof2
In part:
Investors typically cheer large capital returns, whether they be buybacks or dividends. The problem is that Wall Street projects a 2024 free cash flow for the company of about $530 million, and $770 million for 2025—and those numbers don’t support its buybacks.
To make up the difference, Cleveland-Cliffs—whose bid to buy United States Steel was spurned —will take on more debt. “We are implementing a more shareholder-friendly leverage target of 2.5 times net debt to last 12 months adjusted Ebitda, allowing ourselves even more flexibility for aggressive shareholder returns,” Chief Financial Officer Celso Goncalves said on Tuesday. (Ebitda is short for earnings before interest, taxes, depreciation, and amortization.)
Net debt to Ebitda is a common measure of balance sheet strength. Cliffs’ ratio at the end of the first quarter was about 2.3 times. Dividend payers in the S&P 500 index have an average ratio of about 1.9 times.
“We are surprised [by] the scale of the buybacks, having (incorrectly) assumed that balance sheet flexibility would be the No. 1 priority until the M&A backdrop was fully resolved,” Citigroup analyst Alexander Hacking wrote.
The postearnings stock drop wiped out about $1 billion in market value from Cleveland-Cliffs. That is very close to the debt needed to fund the new buyback.
Capital return to shareholders is great, but investors don’t like robbing Peter to pay Paul.
Barron's with Cover story on Big Pharma and patent cliffs (especially negative on PFE) - https://www.barrons.com/articles/big-pharma-stocks-investors-mistakes-90e3c575?mod=past_editions
MRK and LLY have stayed near their highs. BMY and ABBV are still way off their lows,
MRK, LLY, and BMY hitting new highs. GILD too. ABBV has not returned to highs.
ENTA - I would add that Total stockholders' equity decreased to $191,884K from $216,735K
What a difference in performance with big pharma!!!!
ABBV, MRK, and (of course) LLY doing great. PFE and BMY near long term lows. JNJ and GILD not that volatile and in middle of range.
FGEN - any guesses why it seems to be coming back from the dead?
GILD -
Today’s selloff is a market-cap loss of ~$10B!
TGTX up big again. Back to level of last August before ~66% decrease (and then 200% rebound). Aren't biotechs fun!!!!!! Or heartbreaking!!!!!!!
You can actually have 10 thousand open interest and everything can go to zero.
Open interest is not really an indication for anything.
currently own almost the half open interest and the lowest I paid was 15 cents and highest 45 cents... Stock price must go up for it to work..not open interest..not spread[
RVNC options price is more expensive for Jan 10 calls than ENTA even though ENTA stock price almost touched 10 today.
ZEUS hitting new highs. Cheap on basis of this year's estimates, but next year's estimates much lower. Market still expecting a slow down, but not as much, I guess.
"ENTA with a nice jump today on no news,"
And today it got hit - again with no news. Looks like tax selling is not over yet. Only 6 more trading days.
Maintaining a constant 2.1% yield with 9.6% annual dividend growth (the premise of the calculation in the post you replied to) implies 9.6% annual share-price appreciation, which generates a total return of 11.7%.
Others to consider: KSS, KLG, WBA, VZ, lots of banks. My favorite is AFG, but you dependent on variable dividends to meet the "high-dividend" category.
Many fall into same category as PFE - will they be able to maintain the dividend? Or at a minimum, will they raise the dividend in the future?
The other big drug companies may be better on long term dividends - BMY, ABBV, GILD all have continued raising their dividends, but pay a lot less than the current short term treasuries.
TGTX - up ~15% on news of potential competitor's failure - https://finance.yahoo.com/news/1-merck-kgaa-suffers-major-220340950.html
One of the things from your summary of the quarter that is missing is the annual decrease in shareholder equity - down to $216,735K from $321,334K last year. With the decreased expenses projected next year, the reduction should be less, but if the loss from operations is still $80M, instead of $133M, net worth might be ~$135M after 09/24.
I still think net worth is much more important than cash to analyze financial health. The "debt" has to be paid back. It will be paid (out of the future cash flow), just like any kind of other borrowing.
I took yesterday's rally as an opportunity to sell 1/2 my position (obviously should have sold all). Other people's tax selling may hold down the price for the next 5-6 weeks.
TGTX - up 33% on "earnings" - https://finance.yahoo.com/news/tg-therapeutics-provides-business-reports-113000782.html
I
still don’t understand the move.
You are reading it wrong as that is an accounting "trick". They have $400 million in cash and cash equivalents.
ENTA market value is already below cash
ENTA FY3Q23* financials—6/30/23_cash=$393M:
They are below cash once you factor in the value of the royalty (i.e. they could monetize that tomorrow and be sub cash)
The last few days have been a nice move up for ENTA shareholders but it really doesn't matter much.
TGTX - 4 to ~30 in an year
https://finance.yahoo.com/news/tg-therapeutics-provides-business-reports-113000384.html
Sales do not seem to justify value, but what do I know.
TGTX (oldie but goodie - least now) - huge two day move with fighting analysts on meaning of recent script numbers on MS launch
Treasury direct is SO easy to use!
One year treasury is almost 4.8% today. It is down to 4.25% for a two year. There is a small spread to buy, or no spread if you buy on auction from the fed. Treasury direct is best for small dollars (but a huge pain to use), and and costs at brokers are pretty small so they work for big dollars. JMO.
Barron's this week - a couple articles of interest:
Positive ABBV - https://www.barrons.com/articles/buy-abbvie-stock-price-humira-sales-51669938888?mod=past_editions
Health care manager recommending LLY, APLS, ARGX, and UNH - https://www.barrons.com/articles/four-stocks-to-play-the-future-of-healthcare-innovation-51669879803?mod=past_editions
ENTA's EV at the current share price ($41.58)=~$750M—down sharply from ~$1.4B three months ago.
If there's a better $750M-EV biotech stock out there, I don't know what it is.
So with expenses going up $50-75MM and revenue weak, it is possible for $175-200MM (or higher) loss in next 12 months. Sounds like they might need to raise more money sooner than later.