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The volume was unusually high today. Twice the average. Don’t be surprised if Halo has a sustained rally after this classic double bottom. Strong fundamentals + strong technical and volume! A growth+value stock that is unaffected by inflation/supply chain, etc. Secular success story!
Halozyme price target raised to $50 from $48 at Canacord
Piper Sandler issued estimates for Halozyme Therapeutics’ Q4 2021 earnings at $0.35 EPS, Q1 2022 earnings at $0.45 EPS, Q2 2022 earnings at $0.49 EPS, Q3 2022 earnings at $0.52 EPS, Q4 2022 earnings at $0.58 EPS, FY2022 earnings at $2.03 EPS, FY2023 earnings at $2.99 EPS, FY2024 earnings at $3.82 EPS, FY2025 earnings at $5.17 EPS and FY2026 earnings at $5.75 EPS.
A phat profit margin (greater than 65%) and beautiful earnings growth (see above) offered at bargain prices. Apply a 25 PE multiple (average biotech PE ratio) to any of the annual earnings listed above and you will see where halozyme should be trading each of those years. One could argue that Halozyme deserves a bigger PE since it has a higher profit margin and rate of growth than average biotech but to be conservative just go with a PE of 25.
J&J earnings were mixed, the company beat consensus estimates for certain
key pharmaceutical products, including Tremfya and Darzalex.
Cramer sees lots of acquisitions in biotech. XBI is down nearly 50% and due for major come back.
With great PE and PEG, don’t be surprised if private equity buys Halozyme. Multiple bids?
I would love to see Halozyme partner up with biosimilar makers. I have written to Halozyme about this and been told they have been considering it.
I agree. Halozyme is a superb take over target. I would buy the whole company if I could.
Listen to the JP Morgan presentation posted on Halozyme’s website.
In it Helen said (at 1 minute 45seconds into presentation): “the 2022 guidance and year-over-year comparison is impacted by the ONE TIME REVERSAL of the tax valuation allowance event which occurred in the 3rd quarter of 2021 which results in a few dynamics…. 2022 is the first year of tax expense which we project to be $0.55-$0.60 per share this year.”
At 2 minutes 50 seconds, she said: “the year-over-year comparison is impacted by BOTH the one time income of $0.97 per share in 2021 which was the result of the tax valuation allowance reversal AND ALSO the first year of tax expense of $0.55-0.60 per share”
This $0.55-0.60 is about the exact amount in the difference between the street consensus vs halo’s guidance for 2022.
The street missed this important nuance. It will take a day or two for the market to digest this info and reflect the otherwise super-positive updates Helen gave us FOR THE FIRST TIME yesterday:
1) guidance on royalties beyond 2027 and Debunking the naysayers’ $1 billion as peak royalties for halo, Slide 10 and 21 show royalty growth to well over $1 billion by 2031.
2) New, higher yield ENHANZE® API
3) New rHuPH20, with extended room temperature stability, and with patent protection to 2032 in Europe and 2034 in the US
4) At 25 minutes, 26 seconds, she debunked the naysayers’s biosimilar/patent -cliff affect on royalties: “this will not be the case and indeed it is not even possible with our Enhanze portfolio.” She then gave several reasons for this conviction. It is worth your while to listen to the facts she shared.
The 2022 street consensus is old and likely does not factor in other non-operational expense of paying for the share-buybacks (I don’t know how much will come from the cash on balance sheet vs. from revenue. Sounds like Helen wants to keep some fresh powder)
JMP Securities reiterated a Buy rating on Halozyme today, with a price target of $55.00.
… or other nonoperational expenses such as buying back stocks?
The top-line guidance was raised today. It seems like the bottom-line variation vs. the street is non-operational matter.
If so, very positive day and halo will be up once market digests the info and XBI turns green.
“According to yahoo finance average revenue estimate for 2022 is $569M, so $9M less than the top of the range of the guidance provided this morning.” Since the operating expenses cannot possibly be all that much higher in 2022 vs. 2021, then the difference in the bottomline (street vs. guidance) must be due to something non-operational (?street did not factor in taxes since it’s the first year, halo will be paying them)
Did the street’s 2022 not factor in the taxes Halo will have to pay? Is that why street estimate was higher?
buying more here on the dip. Halo was trading well above $42 today before getting dragged down by XBI and IBB
Turns out it was a rumor. Samsung denies.
The Biogen buyout announced today will keep IBB and XBI hot for sometime to come. Halo is on a secular uptrend. IBB and XBI turning green will be icing on the Halo cake.
When we look back from $70-80 range to these cheap levels around $40’s, you will be sorry for not accumulating more.
The re-rating of this great company/stock is a stepwise process and does not happen overnight. It will take weeks. I hope that the most ardent nay-sayers on this board recognize that Halozyme is still cheap and we are still early in this upward re-rating transition. You can confidently add at these still bargain values.
Anything below a PE of 25 is a steal for our PEG of 0.7 and profit margin of 65%.
2 Game-Changing Stocks to Invest $1,000 in Right Now
Do not miss out on these two fundamentally strong stocks.
Key Points
Marvell Technology is reporting robust demand for its chips in the data center and automotive markets.
Halozyme's ENHANZE drug delivery platform has significant growth prospects in the coming years.
Motley Fool Issues Rare “All In” Buy Alert
The U.S. equity market breathed a sigh of relief on Dec. 16 after the U.S. Federal Reserve disclosed its plans for reduced monthly bond-buying and increased interest rates for 2022. The central bank's aggressive stance on managing the stickier-than-expected inflation can prove to be a major headwind for several growth stocks. Especially those relying excessively on cheap capital. However, fundamentally strong companies with several growth catalysts and robust financial performance could easily withstand those headwinds.
Companies like Marvell Technology (NASDAQ:MRVL) and Halozyme Therapeutics (NASDAQ:HALO) can prove to be attractive picks for retail investors, even if they have only $1,000 to invest. Here's why.
Halozyme Therapeutics
Halozyme Therapeutics is undoubtedly one of the safest biotech picks thanks to its robust revenue growth trajectory and solid margins. The company's proprietary drug delivery technology ENHANZE enables change in the process of treatment for several drugs from intravenous to subcutaneous. This technology helps reduce the drug administration time from several hours to only minutes.
Since patients can now receive treatment at home instead of in a hospital setting, the ENHANZE platform is playing a major role in reducing overall healthcare costs and the burden of care on patients and caregivers. Halozyme has entered into licensing agreements for the ENHANZE platform with eleven prominent biopharmaceutical companies. ENHANZE is already being used in five commercialized partner drugs, with potential global sales of $22 billion in 2024.
Royalties (average mid-single-digit percentage of global sales of the partnered drugs) accounted for around 35% of Halozyme's total sales in 2020. With the company expecting Federal Drug Administration (FDA) approvals for more than five additional partnered drugs and more than five products entering phase 3 clinical trials, royalties are expected to account for around 60% of its total revenue. Halozyme has projected its royalty revenue to grow annually at a compound annual growth rate (CAGR) of 40% from $89 million in 2020 to around $1 billion in 2027.
The pharmaceutical industry is rapidly opting for antibody-based drugs over small-molecule oral therapies. Halozyme stands to benefit from new collaboration agreements as well as new drug-development programs. These would be an addition to the company's current projections for royalties. The company also expects co-formulation patents filed by partners to significantly extend the royalty period beyond 2024 in Europe and 2027 in the U.S.
Unlike many biotech companies, Halozyme boasts strong financials. The company's trailing-12-month revenues are up 132% year over year to $463 million, while net income soared by 1,800% year over year to $409.1 million. With the share of royalties (recurring revenue) as a percentage of the total revenue expected to grow, the company will also witness a solid improvement in overall revenue visibility.
Halozyme also has a very strong balance sheet, with $815.9 million in cash and cash equivalents, and $879.1 million in debt at the end of Q3 (ending Sep. 30, 2021). Holding a solid product offering, improving financials, and a robust balance sheet, the stock is well-positioned to grow rapidly in the coming years.
https://www.fool.com/investing/2021/12/22/2-game-changing-stocks-to-invest-1000-in-right-now/
… oh and one more thing:
Juicy share buybacks
Nothing to see here, so boring:
1) halo’s partner, VIIV got FDA approval
2) Halo’s partner, Argenx got FDA approval
3) rerating of stock price based on its PEG 0.7, PE 14 and 65% profit margin
4) all green momentum technicals
5) investor excitement about CEO’s hints regarding new Psychiatry and neurology partnerships.
??????
Nice! Halozyme is firing on all cylinders :)
Agreed. Investors definitely think reinvesting in Halozyme is a better strategy than paying up for an unproven platform (at least until halo’s share price truly reflects the fabulous Enhanze earnings)
With the proven/de-risked multi-year growth from just the current programs/partnerships and its phat profit margins, Halozyme will likely settle at least around a 26 PE ratio. This is truly a very conservative forecast as Biotech industry current average PE is 26 (per Simply Wall Street) and 31 (per NYU Stern)
That would be a smooth/conservative double from here (current PE is around 14).
Nothing is a sure bet in investing but fundamental indications (value & growth) as well as now the momentum trends confidently flash green for Halozyme. I’ll continue to buy at all levels below $80.
$ARGX The U.S. Food and Drug Administration today approved Vyvgart (efgartigimod) for the treatment of generalized myasthenia gravis.
All joking aside, the truth is that for those who did not see the tremendous value in Halozyme, they are still lucky. Halozyme is still at about 14 PE and 0.7 PEG ratios.
So you have time to load up on this bargain. Be careful though, this time it has momentum and technicals behind it too. The train will not be at this station for long. 40’s in no time.
How could this be??? It must be the XBI, wait no, it has to the pdufa date for efgartigimod!!!
How could such a terrible company with horrible management be up in price this week? Especially after that unthinkable buyback announcement late last week. I am shocked! :)
Oh yes, “Huge resistance at $35”!!!
Over medium to long term, fundamental valuations (profit margins, PE, PEG/growth ratios) dictate stock price. True investors on this boards and other media have been pointing out the amazing PE (12), PEG (0.6) ratios and the awesome profit margins (over 60%) for Halozyme.
We went through a few months of irrational market pricing for Halozyme. The silliness seems to be over. I hope people who take the time to read messages here have been and are taking advantage of the bargain we’ve enjoyed.
“The stock market is a device for transferring money from the impatient to the patient.” Warren Buffett “Time is the friend of the wonderful business.” One clear and simple investment edge that anyone can choose to take advantage of is patience.
You are correct. But the company can cover those in the disclosures to the bank/institutions involved.
“company also can choose to disclose any material non-public information prior to any share repurchase if it is in possession of material non-public information at a time when it is seeking to make a share repurchase outside of a Rule 10b5-1 trading plan.”
From:
https://corpgov.law.harvard.edu/2013/03/14/questions-surrounding-share-repurchases/
I think the tell will be in the ASR price. If the price is higher than last week’s price, then there are likely positive non-public catalysts around the corner. Otherwise why would the board of directors approve to pay the ASR fees and a higher share price than what they could get on the open market. They could have just gone with normal (non-accelerated) buy backs (as they did with previous buybacks).
This is a sign of extreme confidence by the board of directors.
From https://www.investopedia.com/terms/a/accelerated-share-repurchase.asp
“Benefits of an Accelerated Share Repurchase (ASR)
To investors, stock buyback events indicate that the company has ample cash on hand, which it's willing to use to reward shareholders. For this reason, accelerated share repurchase programs generally benefit participating investors for several reasons.
First, the completion of this process can radically reduce the outstanding shares in the world, which spikes the earnings per share (EPS) of stock still in circulation. Second, the price of the stock should theoretically begin rising because the stock becomes more attractive to investors, thereby increasing demand.
A stock buyback benefits investors because the reduced number of shares outstanding typically increases share price over time.
Special Considerations
Accelerated share repurchase programs don't just serve to raise a stock price. They also enable companies to swiftly consolidate ownership. Simply put: with each share of stock a company issues, it must likewise extend an ownership stake in the business to the shareholder who made the investment. This effectively lets investors influence a company's financial and business decisions. But by depressing the number of shares outstanding, the company can amplify its control when making key strategic moves.
Example of an Accelerated Share Repurchase (ASR)
On Aug. 19, 2020, Intel Corporation announced it was entering into accelerated share repurchase agreements to repurchase $10 billion of its common stock. International banking group BNP Paribas Securities Corp. acted as the structuring adviser to Intel on the ASR agreements.2??
According to the terms of the ASR agreements, Intel agreed to initially receive approximately 166 million shares. The total number of shares to be repurchased by the company would be based on the volume-weighted average price (VWAP) of the company's common stock during the term of the agreements. This would be subject to adjustments and a discount. The final settlement would occur by the end of 2020.2??
According to Intel CEO Bob Swan, a key driver for the share repurchase was the company's belief that the shares were trading well below their intrinsic valuation. Strong operating results in 2020 meant the company could fund the share repurchases with existing cash, allowing the company to return capital to stockholders through the repurchases and through dividends as well.2??”
Let me put it in a way that is easy to understand.
Halozyme’s return on equity is 263.90% (https://finviz.com/quote.ashx?t=HALO)
When Helen thinks of spending company’s money, she has to compare anything she is considering against Halozyme itself. When you go shopping, if you are smart, you want to buy the best value out there. If the best value is more of what you have, then so be it. There are not many de-risked high-margin platforms at bargain prices out there for Hellen to buy.
Show me another biotech platform with better earnings growth, margins, and ROE offered at bargain prices like halozyme and I will agree with you. Until then, I want Helen to use the company funds (our funds) to buy back more of Halozyme. It is the best deal out there.
Like Howeeme said, this was a brilliant move with long-lasting effects. The EPS went up for every quarter to come because there are fewer shares and existing investor have a larger ownership of future cash flow. This is fundamental finance.
If you and 2 other people own a highly profitable and growing restaurant and 2 of you buy the 3rd partners out, instead of 3 people owning the future cash flow of the restaurant, now only 2 of you own it. This increases the value of your share. Simple and undeniable.
Nicely stated. I agree 100%. I also think that they could have done all of this without the ACCELERATED buyback arrangement. The fact that they are in such a rush to buy back at these level tells me they have some major irons in the fire that are about to become public very soon.
“I also believe the stock buybacks were a big mistake. The current round is complete and I hope they refrian from any further such mindlessness.” 12/8/21
12/9/21 Halozyme announces a fresh round of buybacks AFTER market close
12/10/21 halozyme trades up 8.42% while IBB and XBI trade down 1.5% and 1.6%
“A very unimpressive response to the big announcement. No surprise there. CFO ain't fooling anybody except Helen and the BOD.” 12/10/21
Should Halozyme not gone down in price since stock buy backs are a “big mistake”?
Investing.com | Dec 10, 2021 12:26AM ET
JMP Securities Stick to Their Buy Rating for Halozyme Therapeutics
JMP Securities analyst Jason Butler reiterated a Buy rating on Halozyme (NASDAQ:HALO) Therapeutics on Friday, setting a price target of $55, which is approximately 72.85% above the present share price of $31.82.
Butler expects Halozyme Therapeutics to post earnings per share (EPS) of $1.53 for the fourth quarter of 2021.
Definitely
Don’t worry. The longs will… all the way to the bank
The accelerated portion (to be completed in 2021) is the most import part of the news. Clearly there are major positive catalysts (deals) in the works. They want to buy back shares before price goes up due to the catalysts around the corner. Otherwise why even bother with the accelerated portion. They could have just done like they did before or like most other companies do (i.e. without the accelerated part)
They raised cash in the $50’s via super low interest convertible bonds (interest rate of less than 1%) and now they get to buy back shares at a major discount. In retrospect, it is a brilliant move.
Huge share buy back! Exactly what the doctor ordered. Brilliant move. Enjoy the ride; that is if you loaded up instead of nay-saying.
7 Best Drug Stocks to Buy for 2022 Without Covid Catalysts
Not all drug stocks are Covid-19 stocks
1h ago · By Thomas Niel
Drug Stocks for 2022: Halozyme Therapeutics (HALO)
A close-up concept image of a tiny glass vial with a strand of DNA in it.
Source: Shutterstock
Already in the revenue stage, Halozyme Therapeutics is a drug delivery platform company. Its main platform, Enhanze, can be used to enable subcutaneous delivery of typically IV-delivered drugs.
With the advantages offered by Enhanze, it has found big success licensing this technology to other biopharma companies. So far, it’s formed 11 partnerships, covering 61 different treatments. Per company projections, annual royalty revenue could soar to as much as $1 billion by 2027. Pretty impressive, given Halozyme’s total revenue over the past twelve months is around $463 million.
However, given its main source of revenue coming from a patent that expires in 2027, investors have given the company a low valuation. At today’s prices, HALO stock sports a forward price-to-earnings (P/E) ratio of 18.5x. Then again, CEO Helen Torley and the management team is fully aware of this revenue durability issue, as seen in the company’s most recent conference call. Between co-formulation patents, and corporation relation patent opportunities, the company may be able to extend the life of its flagship technology.
In short, this perception that it’s a “melting ice cube” may work to your advantage. Buying now, ahead of developments in 2022 that secure Halozyme’s prospects could enable the stock, at around $33.40 per share today, to make its way back above $50 per share.
https://investorplace.com/2021/12/7-best-drug-stocks-buy-2022-without-covid-catalysts/
In terms of buying stocks with real earnings growth offered at a reasonable price (Warren Buffet’s style) Halo has a PEG ratio of 0.6 (https://finviz.com/quote.ashx?t=HALO). PEG ratios up to 1.0 are generally considered reasonable or safe by most. This means Halo can run up by about 66% From here and still be considered fair value.
15 best stocks to buy for 2022
Insider Monkey:
9. Halozyme Therapeutics, Inc. (NASDAQ:HALO)
Number of Hedge Fund Holders: 23
Halozyme Therapeutics, Inc. (NASDAQ:HALO) is a biopharma technology platform firm. The company has registered a 145% increase in royalties between June and September this year as the sales of Darzalex, an FDA-approved second-line therapy for multiple myeloma, skyrocket. The company is also on the top of a list of high growth stocks for 2022 released by Goldman Sachs, with consensus 3-year profit margin of 63% and consensus 3-year sales growth rate of 30%.
On December 2, investment advisory Canaccord maintained a Buy rating on Halozyme Therapeutics, Inc. (NASDAQ:HALO) stock and raised the price target to $48 from $27, noting that the firm had achieved “sustainable positive free cash flow from operations”.
At the end of the third quarter of 2021, 23 hedge funds in the database of Insider Monkey held stakes worth $179 million in Halozyme Therapeutics, Inc. (NASDAQ:HALO), up from 20 the preceding quarter worth $194 million.
https://finance.yahoo.com/news/15-best-stocks-buy-2022-163252935.html