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Thoratec Corp. Message Board

  • hlchlc1234 hlchlc1234 May 28, 2009 12:05 PM Flag

    Why is THOR falling in a rising market?

    THOR began falling the day they gave their presentation at JPM. What in the world did they say that has caused it to tank 20% while the market has bee rising?

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    • THOR is a 50+ PE stock in a market that does not support buying many high PE stocks at all....THOR is just a momentum stock at this level ....Soon momentum will be upward ....THOR is one solid company either way ...

      • 1 Reply to knrme60
      • Price earnings is suppose to be forward looking (just like discounting future cash flows); you are quoting the trailing 12 months p/e which is 51.

        If they hit their forecast of 77 cents this year (not sure this includes Heartware) which is conservative (considering they did 22 cents this quarter, not historically a strong quarter) then the p/e for just the next three quarters is 32 and at their current earnings growth pace (which was 39% for the last quarter!!) this stock should be viewed as cheap. Based on the last quarter Thor is trading UNDER it's current p/e.

        If you look out to 2010 and 2011 the p/e drops to single digits at @25 per share.

        So do not agree with your assessment at all.

        I believe it is the uncertainty with Heartware.

    • Maybe this is the reason(from Briefing.com).....

      27-May-09
      07:42 THOR Thoratec: Risk FTC blocks HeartWare merger not insignificant - Collins Stewart (26.67 )

      Collins Stewart notes as part of the FTC's review of THOR's proposed acquisition of HeartWare (HTWR), the agency issued a Request for Additional Information at the end of March. Firm believes that the risk that the FTC blocks this merger is not insignificant. On the other hand, should the merger be approved, they believe that the stock could trade 15-20% higher than the current price. In their discussion with lawyers, firm understands that the FTC will likely seek to narrowly define the affected economic mkt. In this case, this could mean focusing the analysis on just end-stage heart failure treated with VADs, which would preclude Thoratec from trying to move the argument upstream by trying to define the heart failure mkt that they compete in to include drugs and CRTs or other device therapies. They believe that the FTC will primarily be focused on Thoratec's pricing power should potential competition from HeartWare be eliminated.

      • 2 Replies to readville
      • Where did you get that Briefing.com article?!!

        They said exactly the opposite of what you claim on fly-on-the-wall:


        http://www.theflyonthewall.com/permalinks/entry.php/THOR;HTWRid1090842


        Thoratec Laboratories could trade up on merger approval, says Collins Stewart
        Collins Stewart does not see significant risk of the FTC blocking Thoratec's (THOR) acquisition of HeartWare (HTWR) and believes Thoratec shares could trade up 15%-20% on the decision. The firm keeps a Hold rating on the stock. :theflyonthewall.com


        Please post your link.


        I believe the problem Thor is having is three-fold:

        1) P4 is right; the acqusition of Heartware is dilutive to earnings as well as a drain on earnings.

        2) There is risk that the Heartware may not go through putting buyers on the side-line and weakening the bid.

        3) Thor is a channel stock manipulated by the convertible arb shops. (Darby is right).

      • Yes, that's what's been in the back of my mind. THOR would have a lock on the market for years to come if merger went through...but if the merger failed HRTW with its superior device could find other sources of help and eventually give THOR serious competition.

    • It's JMP -- not JPM. I just listened to it. Nothing new. Share price probably reflects "buy on rumor, sell on news," and is related to earnings. There doesn't seem to be anything that would function as a catalyst near term. Also, the market has been volatile the last week or so; and investors are worried in general that Obama is taking aim at healthcare companies.

 
THOR
44.98-0.17(-0.38%)May 22 4:00 PMEDT