Tim Eriksen Posted December 28, 2017 Share Posted December 28, 2017 Only one I have ever seen is from an SEC filing from 2000. It showed the CEO at just under 20%. Officers and Directors another 10%. Two other large shareholders with 25% and 9% respectively. Link to comment Share on other sites More sharing options...
writser Posted December 28, 2017 Share Posted December 28, 2017 Officers and directors own slightly more than 50% afaik. Link to comment Share on other sites More sharing options...
Foreign Tuffett Posted January 10, 2018 Share Posted January 10, 2018 I'm puzzled by PDRX trading so cheaply. Obviously it's an extremely illiquid nano cap that doesn't file with the SEC and trades OTC, so it probably deserves to trade at a discount. But a 1.9 EV to TTM operating profit ratio? A over 40% free cash flow to EV yield? Slightly less than NCAV for a consistently profitable company? I think this is being priced off its P/E ratio, which at 16.4X, doesn't appear to be much of a bargain. The difference of course lies in PDRX's large cash and cash equivalent holdings. As even a cursory reading of the shareholders' letters makes clear, management is conservative and believes that being well capitalized is a competitive advantage. A CEO that didn't care whatsoever about shareholder value though, probably wouldn't make statements like the below. Actually they probably wouldn't write shareholder letters at all. 2013 Annual Report: "This is a shareholder owned company and I as well as all our management recognize the stewardship responsibility you have bestowed upon us." 2014 Annual Report: "In closing, this is a shareholder owned company, we will always be mindful of the trust you place in our stewardship of this company." 2015 Annual Report: "We recognize the responsibility you have placed in our management team. We strive every day to move forward in an ever changing world." Also, if the company is ever sold shareholders should do incredibly well, as an acquirer would have to pay something approaching fair value for the operating business, which currently is being valued at very little ex-cash. Link to comment Share on other sites More sharing options...
Tim Eriksen Posted January 10, 2018 Share Posted January 10, 2018 The 5% yield lessens the risk that management squanders the cash. Link to comment Share on other sites More sharing options...
Foreign Tuffett Posted January 10, 2018 Share Posted January 10, 2018 The 5% yield lessens the risk that management squanders the cash. Agreed, though I think management is unlikely (based on their track record) to attempt a big empire building-type acquisition, dividend or no dividend. They seem much more like the "there's danger around every corner, therefore we should hold plenty of cash" types. I do think that last year's dividend is a signal that management is comfortable with the size of its cash hoard, and doesn't see amassing cash as an end in itself. Link to comment Share on other sites More sharing options...
KJP Posted January 10, 2018 Share Posted January 10, 2018 The 5% yield lessens the risk that management squanders the cash. Agreed, though I think management is unlikely (based on their track record) to attempt a big empire building-type acquisition, dividend or no dividend. They seem much more like the "there's danger around every corner, therefore we should hold plenty of cash" types. I do think that last year's dividend is a signal that management is comfortable with the size of its cash hoard, and doesn't see amassing cash as an end in itself. 1. At least initially, the dividend was described as "one-time." [source: http://www.pdrx.com/pressreleases.html] Has management stated that they will start paying dividends regularly? 2. Investing in "cash boxes" is boring and requires a lot of patience, so I suspect many people don't do it for that reason alone. Relatedly, I was playing around with IRRs on an investment in PD-RX depending on various assumptions. In connection with that exercise, I'm curious: What's the maximum you would pay today for shares of PD-RX? Link to comment Share on other sites More sharing options...
Partner24 Posted January 10, 2018 Share Posted January 10, 2018 I've been a shareholder since approximately 5 years and so far I'm very satisfied. The business is boring, cash flows are positive, the balance sheet is great, the management is conservative, the stock price is very cheap. IMO, the intrinsic value is far higher than the actual market price. But since it is a pink sheet, I can't invest in it in a RRSP account, so the investment is limited. The only other boring, cash flow positive, cash rich and cheap company that I've found so far is CGA. If you have other ideas like these, I'm very interested to hear them. Regarding the cash returns to the shareholders, they did a stock repurchase in the past (was a great idea), then they declared dividends after that (good idea too). I would guess that they want to keep flexibility, so they don't declare those cash returns as a repetitive thing... Link to comment Share on other sites More sharing options...
KJP Posted January 10, 2018 Share Posted January 10, 2018 If you have other ideas like these, I'm very interested to hear them. You may be interested in: George Risk Industries (RSKIA) Advant-E Corporation (ADVC) Parkit (PKT; PKTEF) Command Center (CCNI) Pacific Health Care Organization (PFHO) Innovative Food Holdings (IVFH) Evergreen Gaming (TNA) Link to comment Share on other sites More sharing options...
Partner24 Posted January 11, 2018 Share Posted January 11, 2018 If you have other ideas like these, I'm very interested to hear them. You may be interested in: George Risk Industries (RSKIA) Advant-E Corporation (ADVC) Parkit (PKT; PKTEF) Command Center (CCNI) Pacific Health Care Organization (PFHO) Innovative Food Holdings (IVFH) Evergreen Gaming (TNA) I'll have a look. Thank you very much! Link to comment Share on other sites More sharing options...
writser Posted January 11, 2018 Share Posted January 11, 2018 Or some foreign stuff: Nam Lee pressed metals Ming Fai Holdings PNE Industries Alco Holdings And basically every company in Japan (Isamu paint, Uehara Sei Shoji) Link to comment Share on other sites More sharing options...
no_free_lunch Posted January 13, 2018 Share Posted January 13, 2018 I think you guys might have actually moved the market on this. It's up 10-15% over the past few days. Was just getting to the point where I was ready to build a position. It still seems reasonably priced but given where it was trading oh, back on tuesday it is hard to buy at these levels. I think though that if I wasn't aware of past history I would still be a buyer right now. Funny how that works. Link to comment Share on other sites More sharing options...
no_free_lunch Posted January 13, 2018 Share Posted January 13, 2018 PDRX pays a 39% tax rate. I am not sure of the tax reform impact but if it drops the rate by 13% (I heard that was the standard drop but correct me if I'm wrong) that would increase earnings by almost 20%. The $.36 earnings last year would go up to $.44 without any growth assumptions. That translates to a 15pe with all that cash thrown in for free. The way I see it, as far as modeling it: $.44 earnings * 12 multiplier (it's a specialized retailer, seems quite conservative) = $5.28 I think you can also split the cash out now that they are paying a dividend. The multiple would go up if there is ever a special dividend. $4.15 cash & equivalent * 0.6 holding company discount = $2.45 Total conservative NAV = $7.73 Based on this, it still seams reasonably priced. Link to comment Share on other sites More sharing options...
KJP Posted January 13, 2018 Share Posted January 13, 2018 I think you can also split the cash out now that they are paying a dividend. The press release accompanying the 2017 dividend referred to it as a "one-time" dividend. Has management now said that they intend to pay regular dividends? Link to comment Share on other sites More sharing options...
writser Posted January 13, 2018 Share Posted January 13, 2018 Nope, they have not. However, it's a sign in the right direction and I wouldn't be surprised if they do it again this year. Link to comment Share on other sites More sharing options...
Foreign Tuffett Posted January 13, 2018 Share Posted January 13, 2018 I think you guys might have actually moved the market on this. It's up 10-15% over the past few days. Was just getting to the point where I was ready to build a position. It still seems reasonably priced but given where it was trading oh, back on tuesday it is hard to buy at these levels. I think though that if I wasn't aware of past history I would still be a buyer right now. Funny how that works. I also struggle with my thinking getting "anchored" to whatever the stock price is when I begin looking at an idea. P/E isn't one of my preferred valuation metrics, but directionally I agree with you. At $6.75 per share, 2017's enterprise value / operating profit is ~3.36, which looks very cheap on a purely quantitative basis. I think it looks even cheaper when you start to think about this business qualitatively (consistently profitable, owner-operator management, has been around 30 years, etc.). I think their income tax rate next year will no higher than of 27% (6% Oklahoma state corporate income tax rate + new 21% federal max rate). Note that I'm not a tax attorney and am only broadly familiar with the new tax bill. Assuming operating performance doesn't significantly deteriorate, I think it's quite likely a dividend will be declared again this year, especially considering the newly lowered tax rate. I hope this doesn't come off like I'm trying to pump this stock. I just think that if someone was able to put together a portfolio of solid companies like PDRX at prices similar to where it's currently trading, they would likely do extremely well. This is basically the idea behind "The Acquirer's Multiple" quantitative strategy. Note that PDRX would be the single cheapest company in The Acquirer's Multiple's Large Cap 1000 if it were included in that index (yes, I'm aware PDRX is a nano cap and not a large cap). If you exclude the two ADRs at the top of the list, PDRX is nearly three turns cheaper than the cheapest US-based large cap. https://acquirersmultiple.com/screener/large-cap/ Link to comment Share on other sites More sharing options...
NeverLoseMoney Posted April 6, 2018 Share Posted April 6, 2018 Nope, they have not. However, it's a sign in the right direction and I wouldn't be surprised if they do it again this year. Looks like they'll be paying a $0.66 dividend this year. That amount is listed as a scheduled dividend on their OTCMarkets page: https://www.otcmarkets.com/stock/PDRX/security Link to comment Share on other sites More sharing options...
Foreign Tuffett Posted April 9, 2018 Share Posted April 9, 2018 Nope, they have not. However, it's a sign in the right direction and I wouldn't be surprised if they do it again this year. Looks like they'll be paying a $0.66 dividend this year. That amount is listed as a scheduled dividend on their OTCMarkets page: https://www.otcmarkets.com/stock/PDRX/security Merrill Lynch's website is also showing the $0.66 dividend. Really nice to see that they are going to distribute some profits to shareholders for the second consecutive year. I continue to think this looks like a good opportunity at the current price. At $6.50 a share the EV / TTM OP ratio is ~3. Obviously it's illiquid, but I think it checks just about every box for the individual investor. Link to comment Share on other sites More sharing options...
Partner24 Posted April 10, 2018 Share Posted April 10, 2018 Great news. Like the company. I've owned some since a few years. Cash rich. Free cash flows. Growing over time. Conservatively managed. Shareholders friendly. And still cheap. If you know other companies like that, I'm very interested to read you guys. The only another one that I know and share some of these financial caracteristics actually is CGA. But I prefer the PDRX managers. Cheers! Link to comment Share on other sites More sharing options...
writser Posted April 10, 2018 Share Posted April 10, 2018 I like and own it as well. Quantitatively this has obviously been a very cheap stock for years and the two consecutive (large) dividends suggest that management isn't the worst either. Link to comment Share on other sites More sharing options...
bizaro86 Posted April 10, 2018 Share Posted April 10, 2018 Great news. Like the company. I've owned some since a few years. Cash rich. Free cash flows. Growing over time. Conservatively managed. Shareholders friendly. And still cheap. If you know other companies like that, I'm very interested to read you guys. The only another one that I know and share some of these financial caracteristics actually is CGA. But I prefer the PDRX managers. Cheers! Interesting. Do you think CGA is not a scam? When I see 2X earnings and deep in net-net territory for a chinese company, that tends to be my default position. I'd be curious if you have a variant view here, because if that shareholders actually will get the proceeds of this business its very, very cheap. Link to comment Share on other sites More sharing options...
Foreign Tuffett Posted April 27, 2018 Share Posted April 27, 2018 They issued a press release confirming the upcoming dividend: http://nebula.wsimg.com/8cebfc57e731bc78c18e9eb05aa4bf3d?AccessKeyId=65CD67080D5ABADB075D&disposition=0&alloworigin=1 Link to comment Share on other sites More sharing options...
Hielko Posted April 27, 2018 Share Posted April 27, 2018 Interesting that the date of the PR is may 7 :P Link to comment Share on other sites More sharing options...
Foreign Tuffett Posted September 17, 2018 Share Posted September 17, 2018 This isn't the main reason I own it, but I think PDRX is a pretty good candidate to get bought out at some point. Plus - Cheap and very small - Consistently profitable and cash flow-generative - Based on an earlier post in this thread*, management is at least open to the idea of selling the company - The 2017 annual report lists 6 officers. All of them have been with the company for many years. As of the end of last year the youngest officer is 58, the oldest is 73, and the average age is 66. The CEO is 65 and is a practicing physician. - While insiders probably own a huge % of the company, I don't see any sign that the reigns are going to be handed over to the children of the founders. Google tells me that the CEO's daughter is a practicing dermatologist, so I doubt she's involved with the company. - Overcapitalized, with owned real estate and a clean capital structure Minus - Operates in the heavily regulated pharmaceutical distribution space. Prospective buyers may not be interested in navigating the regulatory environment - There may be regulatory or other imminent business headwinds that I'm unaware of due to my ignorance of the pharma distribution space and the company's limited disclosures - The company's location in Oklahoma City is far from major financial centers * Note that I have no way of confirming this, and haven't spoken to management myself. Link to comment Share on other sites More sharing options...
Foreign Tuffett Posted November 27, 2018 Share Posted November 27, 2018 Nope, they have not. However, it's a sign in the right direction and I wouldn't be surprised if they do it again this year. Looks like they'll be paying a $0.66 dividend this year. That amount is listed as a scheduled dividend on their OTCMarkets page: https://www.otcmarkets.com/stock/PDRX/security OTC Markets now showing an upcoming $2.20 dividend. I suspect this is the reason for the recent activity in the stock. https://www.otcmarkets.com/stock/PDRX/security Link to comment Share on other sites More sharing options...
Partner24 Posted December 3, 2018 Share Posted December 3, 2018 Wow! 2.20$. That's huge for them! Link to comment Share on other sites More sharing options...
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