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Senomyx Inc. Message Board

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  • dcstockpicker dcstockpicker Mar 9, 2011 5:17 PM Flag

    Just added at $ 6.54

    The way I look at this stock, if you are going to trade it, which worrying about the penny you bought in at seems to indicate, you could find much better stocks to do so with. This is a thinly traded stock so although it has the ability to be volatile, it has the very real ability to stick you in a lower position for months.

    That being said, you have to look at this company for why many of us are in this. When the company gets to $45million in commercialized revenue a year, the company is at break even. Currently the company is probably at 1/10th that and is kept afloat by research money. The trick here is to look at all the moving parts including:
    European approvals coming in the next couple months (could double commercialized revenue)
    New bitter blockers, salt enhancers, sweetness enhancers etc.. (just keep in mind that a single sweetener like aspartame, sucralose, etc.,easily generate $600 million a year with a huge margin)

    Jumping in and out from $6 to $7 may work, most of us are looking for something a bit bigger.

    Thus, with a single breakthrough and current commericalization efforts, the idea this company could generate $400 million in earnings a year is very possible. Using a ocnservative p/e of 12 and assuming no more dilution (keeping it 38 million shares), you end up with a stock price of $120.00.

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    • Good analysis. My two cents:

      <When the company gets to $45million in commercialized revenue a year, the company is at break even.>

      Well, not exactly. They've consistently brought in $3-4M per quarter in "research money", so if they can make $45M in commercialization revenue as you suggest, then they'll likely be turning a nice profit ($.40/share in annual earnings).

      <European approvals coming in the next couple months (could double commercialized revenue)>

      Do you mean double Nestle's royalties or overall commercialization revenue? Honestly, I don't think we'll see Nestle's savory in Europe bringing in $4M/year.

      <Thus, with a single breakthrough and current commericalization efforts, the idea this company could generate $400 million in earnings a year is very possible. Using a ocnservative p/e of 12 and assuming no more dilution (keeping it 38 million shares), you end up with a stock price of $120.00.>

      Yowsers! $400M would be great, but it's still a long way away. My hope is that the sucrose enhance that Firmenich will be starting up this year will generate some hefty revenue. And although the Pepsi agreement looks very promising, I sure hope we get news soon about a specific product that they're moving forward on.

      I think we could start to see some big numbers coming in about a year from now. Hopefully next year's guidance on commercialization revenue goes up to $15-20M, with 2013 at over $40M. Then we can reach your $400M number the next year...And if that did happen, the p/e would likely be closer to 25-30, so your share price could be $300. We can dream, can't we?

    • Thanks, I'm going to do some of both. Have a pretty significant core holding at 3.86. I like trading in a stock that I also have a good profit on and no short term plan to sell

 
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