701 LV Posted June 12, 2018 Share Posted June 12, 2018 Just keeps on climbing. Anyone else in this name? Have a price target? I'm trying to decide if I should trim up my position at all. Currently at 5.25x/2018E Sales. Pretty close to what Nevro is trading at (5.7x) but compared to what their future numbers are projected at, there should still be tons of room to run...guess I'm just getting paranoid after watching what a runner this has been the last few months. Link to comment Share on other sites More sharing options...
Gregmal Posted June 12, 2018 Share Posted June 12, 2018 Just keeps on climbing. Anyone else in this name? Have a price target? I'm trying to decide if I should trim up my position at all. Currently at 5.25x/2018E Sales. Pretty close to what Nevro is trading at (5.7x) but compared to what their future numbers are projected at, there should still be tons of room to run...guess I'm just getting paranoid after watching what a runner this has been the last few months. Trimmed a bit yesterday. Still like it but not a core position after the big run. Wish they had held off on the capital raise a little longer, otherwise, very pleased with their execution. Link to comment Share on other sites More sharing options...
InelegantInvestor Posted June 12, 2018 Share Posted June 12, 2018 Also in this. Have not sold any, but it's still a small position for me. So far they have executed, if they continue to, there is ample room for growth. Link to comment Share on other sites More sharing options...
RichardGibbons Posted June 13, 2018 Share Posted June 13, 2018 I'm still in it. After selling half my position at $14, rebuying it at about $9 just after the offering, I resold that half again at about $14 (a bad decision, in retrospect). But I continue to hold half. I'm mulling what to do with that half, partly because I'm uncertain of the moat, and partly because I'm unclear about their long term future. I'm nervous when an allegedly hypergrowth company has a quarter with revenue down sequentially, even if there is an explanation for it. Plus, having their R&D expenses down year over year makes me wonder where they go next. (Sure, they should be focusing on sales and pushing the other two use-cases through regulatory approvals, but is there a product that comes after that?) My back of the napkin still shows upside. $2B primary market with several competitors where, if they take 10%, they get $200M in revenue. $1.4B secondary markets with fewer competitors. If they get 20% of those markets, that's $280M. So, about 500M sales. At a 4x multiple, that's a $2B market cap versus $300M today, or a 6.5 times upside (though part of that return will be diluted away by another equity offering in the next 12 months.) Link to comment Share on other sites More sharing options...
701 LV Posted June 13, 2018 Share Posted June 13, 2018 I've decided to hold..I don't have anything else that I'm needing dry powder for at this time, and I still think NVTR has great long-term potential. Like you said though, it's going to depend on if there gets to be dilution concerns like there were in January and how much of a drag that puts on the stock. Biggest concern of mine is that with their success this has ballooned to be my largest position..Ha a good problem to have I suppose! Link to comment Share on other sites More sharing options...
cameronfen Posted July 2, 2018 Share Posted July 2, 2018 Down a lot on longer approval timeline for US marketing for Virtus regarding treatment of uninary retention. Is this an overreaction. Not in the stock but I've been assuming the growth comes mainly from pain treatment anyway. Link to comment Share on other sites More sharing options...
Gregmal Posted August 7, 2018 Share Posted August 7, 2018 Another solid quarter https://www.nasdaq.com/press-release/nuvectra-reports-second-quarter-2018-financial-results-20180807-01132 Link to comment Share on other sites More sharing options...
701 LV Posted December 20, 2018 Share Posted December 20, 2018 I'm buying more, anyone else? Link to comment Share on other sites More sharing options...
stockspinoffinvesting Posted December 21, 2018 Share Posted December 21, 2018 I'm not buying yet, but I'm watching it closely! Link to comment Share on other sites More sharing options...
701 LV Posted February 1, 2019 Share Posted February 1, 2019 CEO Drees resigned unexpectedly yesterday, shares predictably down big today. Anyone hear reasons for the departure? Link to comment Share on other sites More sharing options...
Gregmal Posted February 1, 2019 Share Posted February 1, 2019 Not sure the reasons but you don't really need to know them at this point to know that it aint good given where this company is in terms of its development cycle. I sold a while ago and frankly think this company runs a very big risk of just becoming another perpetual money losing share issuer. Link to comment Share on other sites More sharing options...
701 LV Posted August 22, 2019 Share Posted August 22, 2019 Been an absolute bloodbath the last year, especially last 6 months. Unfortunately I've ridden it all the way down. Avg cost is still in the mid 6s....Obviously in hindsight, execs jumping ship should have been a bigger red flag and shouldn't have rationalized away the concerns so easily. Now add in Virtis not being approved in '19, rep turnover and a supposed charging issue and here we are. The market has to be pricing in that they may not even hit their quarterly minimum revenue covenant of $12M. Still has $69M in cash, with a burn of $12M last Q. Also filed a $100M mixed shelf offering a few weeks back. Anyone else watching this or have any insights? Link to comment Share on other sites More sharing options...
Gregmal Posted August 22, 2019 Share Posted August 22, 2019 Ive kept an eye on it, but unfortunately I think this one is a doughnut. Link to comment Share on other sites More sharing options...
701 LV Posted August 26, 2019 Share Posted August 26, 2019 Nuvectra Exploring Strategic Options to Enhance Shareholder Value Options included full sale or merger of company. Thoughts are mixed. While I fully agree this company would be better off being absorbed by a bigger player, sucks they're having to do it at these price levels. My cost average of 6's will probably never to be fully made whole - let alone the lost profits from not selling my shares at $25+ levels... Also probably means they do not think they will be able to satisfy their minimum revenue loan covenants... Overall, I guess final lesson to be learned is to always trim winners on the way up - even if you believe their LT potential is much higher, as nothing is guaranteed... Link to comment Share on other sites More sharing options...
701 LV Posted August 29, 2019 Share Posted August 29, 2019 Per latest 8-k. Cutting 20-25% of workforce. Expects related costs of $0.6M in Q3. Savings expected to be around $1.2M in '19 and $5.8M in '20. Link to comment Share on other sites More sharing options...
InelegantInvestor Posted November 13, 2019 Share Posted November 13, 2019 Chapter 11 filing last night was... unexpected. Link to comment Share on other sites More sharing options...
Gregmal Posted November 13, 2019 Share Posted November 13, 2019 This one was definitely fun...good exercise in active management and having to stay on your toes... Link to comment Share on other sites More sharing options...
701 LV Posted November 13, 2019 Share Posted November 13, 2019 Gotta say I'm amazed on how this one ended up playing out. Never thought it would be the best player in the SCS space, but I definitely thought it had room to be a niche player, that would eventually get scooped up by a major. Can someone help me decipher the 8-k filed today, that states only $10M of principal due? Link to comment Share on other sites More sharing options...
Gregmal Posted November 13, 2019 Share Posted November 13, 2019 Gotta say I'm amazed on how this one ended up playing out. Never thought it would be the best player in the SCS space, but I definitely thought it had room to be a niche player, that would eventually get scooped up by a major. Can someone help me decipher the 8-k filed today, that states only $10M of principal due? At quick glance I would assume that is the face amount of the issue relating to whatever defaults were triggered. The company may have multiple lines of credit, and may also have enough cash on hand to cover most of them + some operating expenses. I would guess they are putting a hold on things until the strategic review process concludes. Not that it is something I'm doing, but this could be worth a speculative stab on the basis that net debt isn't huge and the assets do have some uniqueness to them. Link to comment Share on other sites More sharing options...
Spekulatius Posted November 14, 2019 Share Posted November 14, 2019 When the rock star CEO departed after aggressively ramping up sales force, it was a tell tale red flag. I'm glad I immediately exited then around $12-13 levels. Medtech is a tough business with an oligopolistic structure at suppliers end (3-4 major players in many categories), a few hundred key hospitals, and maybe a few thousand influential key docs. Breaking into it while also trying to pay a salesforce that is used to earning substantially from commissions is very hard as NVTR found out (you are bleeding cash for years!). They had a few thousand installations but the innovations they took 10 years to develop were either copied easily or less important and they just didn't have clinical testing data (unlike some peers) to really ramp it up fast before they run out of cash. I never bought this, but been involved in other medtech spinoffs , I can definitely state that this is a tough business for investors. From my experience, many startups manage do get some product in the market and some revenue trajectory, but often the costs outrun the revenues and the increased cash burn does them in. Link to comment Share on other sites More sharing options...
Ronchong Posted November 21, 2019 Share Posted November 21, 2019 Hello all! New CoBF member here, found this forum and decided to sign up. No brainer at 29.99 for the lifetime membership given all the insightful and quality comments that everyone selflessly share. I disgressed but is anyone looking at Nuvectra at these prices? They are delisting on Thurs and will be auctioning their assets off over the next few weeks. As per the bankruptcy filing, they will still be left with a net debt of 2.5M after all the creditors have been paid. Q3 revenue was 9M as compared to 12M a year ago. (Afterall, sales force got restructed and they suspended sales of new equipment). At the implied 3M market cap closing price of yesterday (0.17 cents), you theoretically can buy over assets that will generate conservatively 36M (annualised based on latest Q3 figures) in revenue yearly at a gross margin of 50% for an EV of only 5.5m. Granted they have a purchase commitment of 22M with integer (that would likely be re-negotiated as part of the C11) but is this not a strategic asset that a competitor (Stryker, one of their distributor, is rumoured to be interested) can buy over and put it's own sales force into place at relatively little cost? There seems to be a large margin of safety here. Is it due to market fear or is there something that I'm missing?? Link to comment Share on other sites More sharing options...
Gregmal Posted November 21, 2019 Share Posted November 21, 2019 I had some people look into this, kind of on that basis because the trade you described made sense to me on a certain level, and apparently there may be some liability issues with regard to the charging issues on their Algovita implants. There were also apparently pending issues involving their devices breaking apart inside the patient's body. Much of this was said to be known before Drees and Co went on their sales binge. So you've got several big layers of liability potentially tucked into this. Link to comment Share on other sites More sharing options...
Ronchong Posted November 21, 2019 Share Posted November 21, 2019 Thanks Gregmal! The off balance sheet liabilities seem to be what I was missing, knew there was more to it. The charging issues and lead breakage seems to be common across SCS systems. It looks like a problem that companies would have to take on if they ever thought of entering this space. Not that it changes the strategic potential but it definitely changes the value of a deal. That said, Nuvectra do have insurances that cover some of their product liabilities. I'll have to admit though that I have not spent much time on this counter and have to do a little more digging. Link to comment Share on other sites More sharing options...
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