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GUD.V - Knight Therapeutics


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Q2 results out. GBT’s transformative transaction having huge impacts on results « adjusted » ($M!):

 

 

 

« Revenues were $53,250, an increase of $50,046 or 1,562% over prior year.

Interest income generated of $3,678 a decrease of $2,482 or 40% over prior year.

Net income for the period was $15,512 a decrease of $3,444 or 18% over prior year.

Adjusted earnings1 of $9,972 an increase of $5,408 or 119% over prior year.

 

https://www.globenewswire.com/news-release/2020/08/13/2077814/0/en/Knight-Therapeutics-Reports-Second-Quarter-2020-Results.html

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do they still have $5 cash when completing the transaction in Brazil ?

 

Mr Gary, likely +/- $ 4 cash /EDIT and financial assets (loans, fund, stocks) share if they buy all the shares. Today is the auction day, we should have an update in coming days

 

If you are interested, the transcript :

 

https://seekingalpha.com/article/4368391-knight-therapeutics-inc-khtrf-ceo-jonathan-ross-goodman-on-q2-2020-results-earnings-call

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Snowball I don't know how you estimated the 4$ per share. My estimate is more 3$.

 

Here is my calculation

 

Cash, equivalent, etc at the end on Q2 : 566M $CDN (page 20 of Q2 report)

 

Estimated price for GBT : 150m $CDN  (600M RB)

 

So cash after the acquisition : 410m $CDN

 

Number of shares at the end of Q2 : 131M (page 33)

 

So 410/131 = 3,13

 

My estimate for the earnings per share including 100% of GBT is 0,20$ per share

 

So we are not at 7 or 8 PE but still under 20 which seems good value to me.

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Snowball I don't know how you estimated the 4$ per share. My estimate is more 3$.

 

Here is my calculation

 

Cash, equivalent, etc at the end on Q2 : 566M $CDN (page 20 of Q2 report)

 

Estimated price for GBT : 150m $CDN  (600M RB)

 

So cash after the acquisition : 410m $CDN

 

Number of shares at the end of Q2 : 131M (page 33)

 

So 410/131 = 3,13

 

My estimate for the earnings per share including 100% of GBT is 0,20$ per share

 

So we are not at 7 or 8 PE but still under 20 which seems good value to me.

 

I did the EDIT in my previous message to clarify, it includes more than cash. Thank you for the comment.

 

BN forecasts .23 for 2020 and .33 for 2021.

 

The stock doesn’t seem expensive to me if we look the cash available / investments and the .33 adj. earning forecast for next year. IMO

 

Even if we use your cash number (6.75-3), a 11x p/e adjusted for next year isn’t expensive particularly because you don’t take the $ 130 M invested in funds in the calculation. So we should do a sum of the parts.

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Hah - sorry for the confusion. Just did the numbers off my head.

 

However, this acquisition is $300M CAD? The way I look at it is knowing what little about Jonathan is he has a hurdle of 15% or more. Can be lower, as capital preservation is paramount to him.

 

This acquisition in his head should net $30-$45M in free cash and he has plenty of cash left to do more. This is starting to look more about the Paladin that I missed completely before.

 

Remember, he hits singles and doubles, builds a platform where it’s valued highly and make value accretive acquisitions. It takes time, but that’s what happened at Paladin.

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The biotoscana business seems lackluster. Am I missing something here, I see a business losing money at the moment. They will have to be aggressive in licensing new products. Hopefully he can leverage deals for NA into this new venture.

 

Still holding but this one will require patience.

 

I agree about the patience required!!

 

You wrote they are losing money. Is it because you don’t like-believe the adjusted earning used by the company at Q2 ? As you know they said they got close to $ 10 M adjusted earning for Q2.

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  • 3 weeks later...

Who is the funds with quartile 1 return now owning more than 10 % ? Surprise ?

 

« The Fund held 13,644,000 common shares of Knight at the end of August, representing approximately 10.42% of all outstanding common shares »

 

 

Snowball

For the uninitiated, can you tell us who ?

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Who is the funds with quartile 1 return now owning more than 10 % ? Surprise ?

 

« The Fund held 13,644,000 common shares of Knight at the end of August, representing approximately 10.42% of all outstanding common shares »

 

 

Snowball

For the uninitiated, can you tell us who ?

 

Resolute funds

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Globe says Knight Therapeutics down but not out

 

 

2020-09-22 08:36 ET - In the News

 

The Globe and Mail reports in its Tuesday edition that trading patterns in the run-up toward a vaccine suggest that value stocks (such as those in health care), which have lower growth and tend to be ignored by investors, could perform better. The Globe's David Berman writes that Goldman Sach's analyst David Kostin says, "Many of today's value stocks have faced particularly acute challenges from COVID-19 and will experience the sharpest rebounds in earnings expectations once investors have confidence in the path to normalization." Knight Therapeutics, the Montreal-based pharmaceutical firm, recently completed its acquisition of Brazil's Biotoscana Investments SA -- but COVID-19 stands as a potential obstacle to integration, says McElvaine Investment Management president Tim McElvaine. The stock is down 22 per cent year to date. Mr. McElvaine adds, "So in an environment where COVID is less of a threat, I think that would be helpful to their business." His firm holds a position in Knight. The problem with any value investing strategy, unfortunately, is that value stocks have been lagging the performance of growth stocks for years, frustrating investors who have turned to cheap stocks, notes Mr. Berman.

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