Paying for the deductible of a patient through an organization like CDF is a widely known and accepted practice within the entire pharma industry!!! QCOR is no different than any of the large pharma companies that make similar donations to non-profit organizations to help patients pay for their deductible. Slow and steady!!!
If it was a material amount QCOR's margins wouldn't be as strong as they are. If money was just being past to CDF to buy QCOR's drug the effect would would be no profit on the sales. Clearly that isn't the case. Cash doesn't lie!!!! QCOR will generate more than $800 million of CASH for the two years ending 2015!!!!
Cash doesn't lie!!! QCOR will make more the $6.40 per share in operating cashflow this year and almost $8 in 2014. That would equal almost $800 million in two years!!!! The investigation is a major overhang but unless the government want to put QCOR out of business (highly doubt it considering the drug's benefit as a last line of defense for many critically patients) they will be slapped with a fine probably in the $500 million to $750 million range. The ride is definitely going to be bumpy (it already has been over the last 2 years) for the next year or so but IMHO QCOR will be trading close to $100 by this time next year!! Slow and steady!!! Good luck to all!!!! Not for the faint of heart!!!
Since I posted this message the stock is down $13.25 in 3 1/2 trading days. I'm curious to see if it continues its downward trend throughout December as institutions lock in some profits and investors reassess the price they are willing to pay for growth. Great product and management just a pricey stock at 25X 2017 earnings (assuming 20% compounded growth off of 2013 numbers). I still think the probability of growing into the multiple is a risky play.
If CMG continues to grow its earnings at a 20% COMPOUNDED clip for the next 4-years the multiple would still be almost 25X at the end of 2017. Any sort of hiccup or speed bump would cause the multiple to contract and drive the price down even as the earning grow from $10.50 a share to $21.75 a share. Don't get me wrong CMG is an outstanding run company with excellent management, a strong balance sheet and powerful execution, I just happen to think the probability of CMG growing into the multiple is risky at these price points.