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Vertex Pharmaceuticals Incorporated Message Board

aurorainsider 45 posts  |  Last Activity: Oct 30, 2014 10:32 PM Member since: May 8, 1998
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  • Reply to

    Short Term Indicators

    by john.rosseel Sep 29, 2014 9:13 AM
    aurorainsider aurorainsider Sep 29, 2014 1:58 PM Flag

    As long as the bias is to favor large caps, there isn't going to be much momentum for these sub $500 mil MKT cap stocks. The piece in the Journal today regarding small caps mirrors the sentiment that was recently shared with me by a couple of investment managers that I know. Outside of strong sales/earnings this small company will stay in a range@$2 +/- .

    I see that short interest moved over 400K which represents 4 trading days given the anemic volumes.

  • Reply to

    Short Term Indicators

    by john.rosseel Sep 29, 2014 9:13 AM
    aurorainsider aurorainsider Sep 30, 2014 9:18 AM Flag

    They must be. Let's see... The stock opens @$1.84 on low volume through first 90 minutes. Then it moves up or down two whole pennies, again on low volume. Then right before close, it moves a penny or two in the last minute to finish flat to up or down by one penny. So why would anyone buy???

  • Reply to

    Short Term Indicators

    by john.rosseel Sep 29, 2014 9:13 AM
    aurorainsider aurorainsider Sep 30, 2014 10:09 AM Flag

    Large positions in Westell are surprising to me. With the ownership structure of the two classes of stock, I am puzzled why someone would build a 20+% ownership stake when shareholder activism will only get squelched. Jeffrey Bronchick can make all the noise that he wants, but if Penny or Foskett disagree, there isn't much that Cove Street can dodo. Quite frankly, I think that the ownership structure has hampered shareholder value and caused hesitancy in prospective investors

  • Reply to

    Short Term Indicators

    by john.rosseel Sep 29, 2014 9:13 AM
    aurorainsider aurorainsider Sep 30, 2014 4:04 PM Flag

    There we go. 11% of shares traded in the last minute to finish flat for the day and down 26% for the quarter.

  • Reply to

    Short Term Indicators

    by john.rosseel Sep 29, 2014 9:13 AM
    aurorainsider aurorainsider Oct 1, 2014 1:58 PM Flag

    The entire market is selling off.. The weak hands always go down the most. All of the MM's want to see the great 2014 sell off, so perhaps we are finally getting it.

    The last time we saw a sell off in Westell from $4 down to $3.00, it seemed crazy until the Q 4 earnings came out with the low ball Kentrox numbers. Makes you wonder if someone in Westell is yapping.

  • aurorainsider aurorainsider Oct 3, 2014 6:35 AM Flag

    Consolidation only matters if :first you are willing to sell. Will Buzz Penny finally pull the rip cord?; second you and your products are in demand. Clearly they are with a question mark on ISM.

    Since the market is generally efficient, it would not be a surprise to see the third full quarter of disappointing ISM sales given recentrecent price/share performance. Any M&A activity will only happen when the Kentrox component stabilizes. The risk for Westell given the sentiment of your article is that it continues to reject offers once ISM gets back on its feet. It simply will reach a point when it will not be able to compete and will be left out of those "training" sessions.

    On a side note, as expected, I see Ben Stump isis the new CTO over at Opspec with Cremona.. Surprise
    surprise..

  • Reply to

    Russell 2000 contra indicators

    by wiredtofly1 Oct 1, 2014 9:57 PM
    aurorainsider aurorainsider Oct 3, 2014 10:41 AM Flag

    No bounce here yet. Still selling at cash plus 50% of trailing 12 month sales. A huge discount to all of its peers which are selling at 100% or more of trailing sales less cash and many cases much higher. But until we see volume return (perhaps earnings??), there really isn't much conviction here. The MM took this down $0.20 in two trading days on relatively tame volume. Hard to get excited with these games until positive volume controls the direction

  • Reply to

    Russell 2000 contra indicators

    by wiredtofly1 Oct 1, 2014 9:57 PM
    aurorainsider aurorainsider Oct 3, 2014 1:17 PM Flag

    The price activity really makes me wonder if there is some insider leakage. When this shot down from $4.5 to $3 in just a few weeks, it really didn't make sense on the surface given the positive CSI acquisition call in early March. Then we later find out that the Kentrox numbers were light for the quarter. You don't get a 33% move unless somebody had information before it was made public. Then someone posts the fact that Cremona left before we get Q1 earnings. At the time of the post, he still had not been named Opspec CEO so perhaps the leak is someone at Kentrox? I don't know, but the current price performance is puzzling.

    You would have to think that Cove Street did its homework and is looking beyond the current blip in business. The question is just how long will this ISM sales blip last???

  • Reply to

    Russell 2000 contra indicators

    by wiredtofly1 Oct 1, 2014 9:57 PM
    aurorainsider aurorainsider Oct 3, 2014 3:51 PM Flag

    One million fewer shares should not move this very much. I am reminded however that microcaps can often be defenseless in the wake of a hungry hedge fund. With the lack of any good news there really was not much to protect it. Good news and/or forecast for ISM should cure this issue. Who knows. Perhaps old ponytailed Buzz #$%$ off some in the investment community so they are sending him a message.

  • aurorainsider by aurorainsider Oct 6, 2014 12:38 PM Flag

    Some volatility finally hitting the stock. So selling at just $0.47 for each dollar of trailing 12 months sales (less cash). So which camp is it?? 1. Somebody has tomorrow's news(earnings leak) today? Or 2. Someone is trying to shake the tree of weak hands?

  • Reply to

    volatility today

    by aurorainsider Oct 6, 2014 12:38 PM
    aurorainsider aurorainsider Oct 6, 2014 1:39 PM Flag

    I have to agree. To be sitting at 4 year lows has to be an indictment on the top manager. If you were on the last conference call, the tone that Jeffrey Bronchick had when questioning Gilbert about international sales efforts was fairly obvious. You wonder how much more time ponytailed Buzz gives him?? He isn't getting any younger and at some point he has to be thinking about his exit strategy with all of those shares

  • Reply to

    volatility today

    by aurorainsider Oct 6, 2014 12:38 PM
    aurorainsider aurorainsider Oct 7, 2014 1:19 PM Flag

    Phenne.. No reasonable IR staff is going to respond about potential merger synergies, so don't expect a response from WTT.

    With regards to a buyback. What would happen if each person on the executive committee bought 5k shares? That would speak volumes instead of Gilbert's automatic stock sales plan. With regards to Gilbert's plan: Typically you see this plan in an established company with a more stable stock price and a larger trading volume. Personally, if I really believed in my company, I wouldn't give a penny of the shares away at a discount. You don't see the CFO or other executives enacting that plan. Amy's plan was put in place because her options were facing expiration in July. Gilbett's actions and the perception that the Street has of the company are unacceptable.

  • aurorainsider by aurorainsider Oct 7, 2014 2:46 PM Flag

    CAMP is having a heck of a day today. This should bode well for Westell once the ISM projects ramp back up

  • Reply to

    Notice CAMP today??

    by aurorainsider Oct 7, 2014 2:46 PM
    aurorainsider aurorainsider Oct 7, 2014 6:03 PM Flag

    Wow!! Up 21% on a down day. What happenshappens for Westell when ISM projects pick back up???

  • Reply to

    Major correction at stock markets has begun

    by fat_bob_ger1 Oct 7, 2014 5:01 PM
    aurorainsider aurorainsider Oct 7, 2014 7:58 PM Flag

    With Europe slowing, you would think that companies that derive a lion's share of their revenues in the US would be in favor. I've been listening and reading intently regarding the latest expert opinions on US based small/micro cap that tend to get most of their sales in the US. While certainly the Russell 2000 is already in that official correction territory, many of the experts are risk averse as they expect the coming rise in rates to hurt the small stocks. However, the reasoning behind the avoidance is generally because many small caps have debt ridden balance sheets. Now you look at Westell that has almost $50 mill in cash with zero debt and you should have a sweet spot once the experts figure it out.

  • aurorainsider by aurorainsider Oct 8, 2014 7:55 PM Flag

    The comparison to industry peers is down right ugly. It sure makes you think that something nefarious is behind this move on low volume. Take a look at comp enterprise value/revenue (EV/R) and price/book (P/B). In reality, if Westell had to be sold tomorrow, you have the $47 mil in cash and a tax loss benefit of $39 which at a 35% corp tax rate equals to a little over $12 mil. So in essence, the operating business is really only be valued at about $36 mil or about one dollar for every three dollars of revenue. Major disconnect.

    Adtn: 1.45 EV/R. 1.80 P/B
    Cmtl: 1.4 EV/R. 1.5 P/B
    WTT: 1.07 EV/R. 1.49 P/B
    Comm: 1.76 EV/R. 3.54 P/B
    Calx: .98 EV/R. 1.68 P/B
    Camp: 2.81 EV/R 5.18 P/B
    Nmrx: 2.42 EV/R. 2.34 P/B
    WSTL: 0 .48 EV/R. 0.72 P/B

  • Reply to

    Peer valuation

    by aurorainsider Oct 8, 2014 7:55 PM
    aurorainsider aurorainsider Oct 8, 2014 8:24 PM Flag

    One additional food for thought. The Westell segment ( pre Kentrox/CSI)did $52 mil in revenues last fiscal year. Now if you value that entity at 30 cents per dollardollar (huge discount) of revenue, or $15 mil., then that means the remaining operating units (Kentrox/CSI) are only worth $21 million when you factor in cash and the net benefit of the tax loss benefit? Another way of asking the question: Does it make sense to anyone that the $70 mil that Westell used to buy Kentrox/CSI within the last 18 months is now only worth $21 million????

  • Reply to

    Peer valuation

    by aurorainsider Oct 8, 2014 7:55 PM
    aurorainsider aurorainsider Oct 9, 2014 6:57 AM Flag

    Fat... If you get just a multiple of 1X's revenues and add in cash and net value of tax loss benefit, the yes the stock would be @$3. It may take a couple quarters unless there is strong evidence that ISM business is returning. We should know in 20 trading days. Regarding downside: the current valuation discounts Kentrox to $0 and values CSI and Core Westell (OSP/TMA)segments at less than 50% of revenues. Given these metrics, this is why I say some games are being played here.

  • Reply to

    Peer valuation

    by aurorainsider Oct 8, 2014 7:55 PM
    aurorainsider aurorainsider Oct 9, 2014 12:28 PM Flag

    Stefan. I agree with you regarding Gilbert. Buzz Penny will only allow his nest egg to be mismanaged for so long. However, the CFO has been pretty solid.
    Also regarding the share buyback: the first share repurchase of the $10 mil reserve started in the Quarter ending June of 2012 and continued in subsequent quarters with the price generally slightly north or south of $2 and not $3.6 as you indicate. But with the CEO enacting an automatic sales plan regardless of share price, he doesn't really engender much confidence. Another reason to get rid of him

  • Reply to

    Peer valuation

    by aurorainsider Oct 8, 2014 7:55 PM
    aurorainsider aurorainsider Oct 9, 2014 2:28 PM Flag

    And he was at Andrew before Tellabs. Andrew grew rapidly and was eventually sold to Commscope after posting recod revenues. Again the issue isn't finances. The issue is direction and perception, both of which are attributed to Gilbert.

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