Replies to post #19614 on Savvy Trades and Investments

[wadegarret]

apatel1- MPH.V

You didn't ask me, but I'd like to give my opinion. You know, it depends on how you want to figure "adjusted" EPS. I for one NEVER use EBITDA as adjusted EPS, as it's ridiculous to value a company based on adding back interest expense, depreciation, and taxes. So what do we add/subtract from Net Income to get to adjusted non gaap EPS ? Well of course any one time items should be added/subtracted. However in general I add back stock based compensation and amortization(assuming they don't make a living licensing patents, etc). In the case of MPV, I'm coming up with $.15 non gaap adjusted EPS fully diluted. However this is untaxed, as it appears they have tax loss carryforwards.

[SSKILLZ1]

MPH.V

Here is how I see it. The company says they made .25 adjusted, but here is how I break it down.

They made 3.8 Million in operating income. 3.3 of the 3.5 million in IE was one time in nature, and I ex that out. So In my Mind they made 3.6 Million In net Income.

Now if you want to add back stock based Compensation and Amortization. Amortization was 189K, and stock based compensation was 545K. Under that scenario earnings were .28. I'm not sure I want too add back stock based compensation, but still earnings were in the mid .20's even if you don't, so I find the adjusted earnings of .25 accurate in my opinion.

Now q1 will be their seasonally weakest quarter of the year, I'm guessing (and that all it is) Revs will be in the 7.5-8.5 million range for q1 and then go up from here. My guess is we will see earnings of .15-.20 adjusted in q1, to increase from there.

Stock is cheap, now market didn't take it well because they didn't like that earnings are dropping off in q1 from q4, but I seen that as and expected outcome, since there was shortage of supply, and they kept 39/76 hospital that their competitor lost during that period with a whopping 29/76 considering come on board, so this was far from a one time thing, this is a long-term boost in market share in my opinion.

Their are other interesting things here as well they working on another drug with APicore and and it is coming along, would be nice to have another drug. They also have their drug (the 2.1 million one time expense was for this, that they applied to use the drug for another condition if approved they will be the only drug in their class. Now here's a monopoly I can get behind they actually make money while doing it. I think that will be heard in July, but not sure on that.

They also Have the rights to buy Apicore down the road which they currently own a 5% interest in. Apicore grews sales from 14 million in 2014 to 23 million in 2015. With Ebitda go up from 1 to 3.5 million Now this doesn't affect the current income statement, but it is nice to see the company they could buy, plus own a stake in doing very well and growing rapidly in my opinion.

Conclusion I find MPH.V very undervalued, but the stock is technical weak, and the broader markets are way overbrought, may come in a bit more I wouldn't be surprsied if we drop to the 5.25-5.30 CAD support before this is all over. Having said that I will buy more on weakness. All is just my opinion, and I could always be wrong though.