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.
My valuation is base on my rule of thumb of 2% return on earnings per share. It was an accurate working model before the refi fiasco and I think it's still valid in today's interest rate environment except for the list of things we've talked about that are holding the pps back.
4% is the "mid-single digit" number to work with, that hasn't changed - yet.
I actually think the current projections support a pps today
of ~$85, but the uncertainties of:
a.) IP rolloffs that you mention,
b.) Helen's plan to buy new platforms, and
c.) the lack of a sustained momentum in signing new deals
all are a serious drag on the company's valuation.
New deals are key of course, since they will offset the IP patent issues. New deals are the core of the company's value proposition and until they start coming in at a more regular pace we'll always be under appreciated IMHO.
This should boost us back to the mid 50's at least, and into the mid 60's by EOY, IMHO.
Thanks for your thoughts, all solid imho. In addition, there's a $40 million upfront payment from the most recent ViiV parntership that will hit the bottom line also, or so I believe. Also, we might see some milesones due to some recent regulatory approvals. Could be a good Q.
We'll see,
-Fritz
Maumar is our resident expert on this. Hope he checks in. Good conversation. Thanks.
-Frotz
I'm guessing it's options related selling? Note that my other fave RVNC dropped a buck and a half today also for no apparent reason. I'm sure HALO will bounce off the 200 day line and hold there or move gradually up as we head towards earnings over the next few weeks. Also, no significant volume to demonstrate any true conviction in this down trend. In other words, just normal summer shenanigans. The money managers are all away in their summer cottages and the summer interns manning the desks are not allowed to press too many buttons. LOL!
-Fritz
Yes, agree completely. They've got to keep the tree branching out to get more fruit.
I don't put a lot of stock in death crosses, they just show a trend that has been obvious for a while, so while the two lines are converging, I think we all know why. The question is what price the company's cash flows can support and I do think it can get back to the mid-50's by year's end, absent any nasty surprises or ham handed moves by Helen & Co.
Also, the drop in the 10 year bonds has re-established the value of HALO stock as a quasi-divi play with 2% return as my guide. That was a really accurate metric until the refi bungle and the bond market turbulence. Both of those things are in the rearview mirror, for now at least.
-Fritz
A couple of big deals could easily push the stock to new heights but why do you think the deals are so slow in coming?
Technically this qualifies as a breakout for 2 reasons:
1.) closing substantially over the 50 DMA on decent volume
and
2. a breakout from a reverse head and shoulders pattern starting mid-May
FWIW.
-Fritz
Inflation's a bitch. LOL Thanks for pointing that out. The $10 million upfront per target is the same though if memory is correct.
Two pieces of good news yesterday. We'll see if the market is able to put aside its reservations about the financing fiasco and recover its enthusiasm for the basic HALO proposition. Probably not.
Wonder what their price target is? Not mentioned in the headline.
In the fireside chat Helen downplayed other SC technologies because they have to go through the long regulatory approval process. Is she right?
It was interesting to hear the analyst's expression of the concerns of the investment community, that was the key to the conversation and occurred almost at the end. Helen was fine, but being nice and perky doesn't hide the structural problems.
Of those "concerns", the one you didn't mention was the skepticism on whether HALO can pull off a deal that adds to the income stream without over-paying for it. I've said so myself many times that the purchase of another company by HALo will not be good for the HALO price per share, and the Goldman guy implied as much.
He also suggested that Helen has painted herself into a corner by announcing the intention to make an acquisition. She's got to deliver now, but is faced with a universe in which any promising target will likely be very expensive. This is not a good position to be in and that is why the pps is down in the dumps after the refi. This is not me talking trash, this is just a repetition of what the Goldman guy was pointing towards as problems in the road ahead.
I have not seen any evidence of upgrades and don't expect any. HALO bounced today on low volume after being pretty oversold technically.
-Fritz
What were your takaways?
Is it necessary for Germany, as an example, to get EU approval for German corporate tax rates? I admit I'm not sure either way.
As I understand it the G-7 is comprised of France, Germany, Italy, Canada, the UK, The USA, & Japan, so Ireland is free to continue their status quo.
Nice trade!
Totally agree about the inflation hype, not so sure about the unemployment analysis.
Thanks, Dew. When you handle convertible debt as equity does that just mean that you add the potential convertible share to the Outstanding share count?
Best, -Fritz
I recognize that this is not a settled question and is a matter of debate among those who are far more schooled in this topic than I am. That being said, inflation requires more dollars chasing fewer goods and services in order to be a real sustained phenomenon. This can't happen in a long arc of time when wealth continues to flow from the bottom to the top of the social pyramid.
This concentration of wealth is not a matter of debate, but certain and verifiable.
A resurgence of activist trade unionism (not too likely IMHO) is one way to reverse that but it can also be addressed by tax policy (somewhat more likely), or, some combination of the two.
Absent any meaningful change in this regard, I feel certain that inflation will not be more than a fleeting thing.
Sorry about the ID mix-up.
I would posit that the long term down trend in the velocity part of the equation is directly attributable to the concentration of wealth in fewer and fewer hands.
Thanks, Gary, long time no see. Hope you are well!
-Fritz
I still hold that, with the decline of trade unions and their ability to impact wage growth, the permanent structural risk is deflation rather than inflation. The current inflationary numbers are a temporary artifact IMHO.
That's an example of why I just can't bring myself to buy stock of a company run by Musk.
That was funny. LMAO.
Maumar has been on that and his thoughts are echoed in Catanzaro's opinion.
In fairness, I'm sure he meant more than 24 hours in the future. LOL
What sticks out to me is the actual earnings per share versus the trumped up non GAAP number. That is very likely at least part of the street's negative reaction.
The attempt by the new CFO to distract from that disappointing number was just too obvious and smelled to high heaven. Who did she think she was talking to? A bunch of penny stock gamblers?
She certainly has Helen's ear nowadays, though, and that is concerning to me. This stock has taken a beating since the old CFO left suddenly and that new woman emerged with her "financial engineering" shell games - and we were at all time highs with the wind at our backs until then.
I continue to worry also about what they are cooking up with that $800 million. I'm pretty sure we'll take another hit if they buy some company in a deal that does not look like an outright steal, and of course that's probably not happening.
And speaking of dilution, did you get a chance to see the new compensation package passed in the last annual meeting? What do you think of that?
I'm guessing the market and Piper Sandler just don't understand non-GAAP accounting practices.
Piper Sandler first out of the gate to downgrade.
Non-GAAP: ignore all the charges those nasty accountants make us take and you'll see we really made a slam bang amount of money! Yay for us! (Stupid accounting rules.)
Agreed, though we may see a temporary bounce tomorrow or the next few days.
In all, the call covered no new news that can move the stock, so any bounce will be eaten up by profit takers before the summer doldrums set in.
I was a little unnerved by the emphasis on non-GAAP numbers. That smells of over-reaching and again points to my disdain for this current CFO. She's really starting to look like a trickster from penny stock land. So it goes....
Kudos, I'm glad you were right. Now we need some more deals to get us back on track.
XBI is just normal rotation and will come back in due time. That's an extraneous matter to the real concerns which are internal to HALO.
I think you are seriously overestimating what these bring to the bottom line.
I'm not concerned with sector rotation, though of course it affects the pps. More importantly I've not seen much to support the idea that HALO will show a lot from milestones this quarter so royalties will be the name of the game unless I'm missing something.
If revenue consensus is really $.32 per share as stated in Seeking Alpha, we're in for some serious downgrades after reporting tomorrow. Even at biotechinvestor's higher estimate $40 million, that equates to only $.28 per share. Watch out below.