trading at 4.5x ebitda, this company is as cheap as cooper tire which went through a legal battle.
as the economy sees some light at the end of the tunnel, capital investments are coming which companies like JBL gets the upswing.
The majority of oncologists still use flow cytometry/cytogenetics/immunohistochemistry to run a lab test. Molecular testing is something that is considered to be more advanced:
- looking at cancer cells on dna level to search for certain mutations on genes such as BRCA, KRAS, ALK... and each of gene has many mutations on that. MYGN is specialized in BRCA to find a variety of mutations.
- have you heard of 'personalized medicine', 'FDA accelerating drug approval on cancer drugs'? both issues are driven by molecular testing
- with molecular testings, oncologists know which drugs can effective
Wonder why LH, DGX, BRLI cutting 2014 forecasts? Oncologists are considering molecular testings on their patients which these companies do not have an expertise on. Eventually, LH or DGX will come out and start buying out MYGN, CGIX or any other molecular testing companies. Or drug companies like SNY, LLY will do so.
Think why Miraca bought out Caris at 3x revenue in 2011 at $725M, and Caris is not even the best molecular company.
stock is trading at $26.6 and it has 10 mins to close... given the fact that the option expires tomorrow, call option with the strike of $28 should be 0, but the bid is at $0.15.... hmm...
"Since our last meeting, a large phase 3 trial of drisapersen, a drug with a similar mechanism of action, was reported to be negative, despite increased expression of dystrophin. The disconnect between increased expression of dystrophin and clinical efficacy for drisapersen, combined with previous negative reports for PTC124, another drug thought to act by increasing dystrophin, raises considerable doubt about the biomarker, and consequentially, its ability to reasonably likely predict clinical benefit.”
- Drisapersen is competitors' drug, NOT Sarepta's. FDA is concerned that eteplirsen 'might' have similar situation without backing information.
“Recent natural history data in DMD indicate that a baseline 6-Minute Walk Test (6MWT) ³ 350 meters predicts continued general stability for such patients, not the 75- to 83-meter yearly decline you suggest in the meeting package. Thus, considerable doubt is also cast on the efficacy support provided by your ongoing open-label study (4658-us-202, 96-week data submitted), in which baseline 6MWT was 350 m for all patients.”
- Basically, the company needs to have patients in clinical trial to stay longer to increase data pool.
The market over-reacted on FDA comments, but given the fact that 50% of market cap is in CASH at this point, the company is well situated with cash level throughout next couple years.
Also, Sarepta's approach in RNA may have a significant value as personalized medicine/next generation sequencing is getting a huge demand in medical industry. Now, the cancer drugs are researched based on molecular testing which provides treatment options. RNA sequencing can discover a drug to cancer stop reproducing itself. Look at ILMN for example.
Fannie Mae is NOT profitable at any measure, it had a less amount of write down.
Fannie Mae/Freddie Mac are the main sources of printing massive amount of dollars - banks are no longer holding mortgages, they are just a bunch of brokers of Fannie/Freddie.
Once the government privatizes both entities, there will be a huge hike on mortgage rate to be around 10% range. Free market right? And what about inventories that have been hidden so far?
Going forward, we will have a LONGER maturities in mortgage like Japan. Have you thought about having 50YR mortgage? Have you thought about inheriting your house with mortgage loans attached?
Banks know that the middle class is very tight in cash (disposable income). The only solution for them to have their money back is to extend the maturities - have middle class as their slaves for life.
Don't forget, US debt limit must be increased AGAIN in September, and this is why the stock market has been moving up. Tapering? sure, but regardless, government has no option not to stop printing fiat currency. Government's bond purchasing amount is just a small piece of what they are doing.
Inflation? look at oil price for example, we are over $100 and no one talks about it any more. Why? government has been lying about inflation every day. Soon, we will see oil price trading between $120 - $150 when the government will say 'our economy is getting stronger'. BS.
Gold price? well, no one talks about the decrease in paper gold demand on 1Q was due to the shorting ETFs by HFs. and physical gold demand was actually stronger than last year's. The question is, what happen when there is short covering at the same time when physical demand is keep rising?
Look at other countries, do you see anyone stop printing their currencies? Every day, there are massive amounts of currencies printed by all countries. On top of that the banks are extending credit line. This is what Paulson/Einhorn are talking about.
now with 30yr mortgage rate at 4.7%, the current quarter looks less attractive than 2Q.
with government tapering, less MBS buying, privatization of fannie mae, the demand is less.
some people know that US debt limit has to be increased again in September.
some people know that there will be another Detroit in this year (wonder why the media talks about housing price going up? they are hoping to pump the housing market to prevent another collapse.)
some people know that gold producers already bought put options to hedge their operation.
some people know that people who buy physical gold are for long term, while who sell paper gold, i.e. ETFs, are short term.
some people know that currency war, i.e. printing massive amount of currency by all countries, already started when Japan decided to print Yen without a limit. wonder why the currency is stable among major currencies? because all the countries are printing at the same time.
in order for gold price to stay down, US debt has to come down. but, guess what? the actual US debt is much more than $16.8Tr, and yet, the government tries to hide it all the time.
Gold is currency - it can hold the buying power, it can be exchanged to local currencies.
Dollar? what kind of currency is it that loses the value everyday?!!!
they said it was the largest potash producer, but really?
(by annual sales)
Uralkali - $3bn
POT - $8bn
MOS - $10bn
the bottom line, Uralkali doesn't have enough capacity to influence potash price by 25%.
in order to reduce potash price to go down that much, the demand has to be gone down a lot, but the demand is still growing at the fast pace.
think why Loeb took a large position on CF industries - betting that economic recovery + fiat currency will trigger the inflation which producers are getting the most money out of the system.
there will be no buyout for sure.
look at SEC filings. directors are exercising all their options and sell the shares on the market.
if there is any possible deal, why would directors dumping their options when it could be worth much more?
as i said before, the potential proxy fight is over and there is no catalyst left.
also, look at the last quarterly earning. it had worse than a year ago.
preferred shareholders got March payment but since then, there is no announcement EXCEPT that the company won't pay until they prepare 10K with new auditors...
i guess the company knows that they are getting out of cash. paying dividend on preferred stocks has nothing to do with preparing 10K unless they need to hold cash for reserves...
debt? preferred equity?
its EV is over $1Bn when the market cap is only 1/3 of that.
when the operating margin is squeezed, the leverage becomes your enemy.
The point is, why MHR didn't solve the accounting issues with PwC and dismissed them. Then, they hired BDO USA???
If you look at 8K issue few days ago, the company said that it wouldn't pay out the dividend until they complete the annual report, i.e. having a new accounting firm to understand the detail of its financials, it will take more than few months.
Soon, the company announces that it would delay 10K due to the preparation... then, a write-down on assets... renegotiation with debt holders... fire sale on its assets to keep the liquidity... suspension on dividend payout... additional share sale on common stock... some change on management team... NYSE delisting...
Directly from IRS website:
WASHINGTON — The Internal Revenue Service today announced that it has a reached a settlement with the accounting firm of BDO USA, LLP (formerly BDO Seidman LLP, hereafter “BDO”). Under the settlement, BDO will pay a civil penalty to the IRS of slightly more than $34.4 million stemming from its violation of the tax law concerning the registration of tax shelters. BDO did not register various tax shelters as required by law, some of which were abusive and fraudulent, in an effort to conceal the tax shelters from the IRS and assist high-income taxpayers evade federal income taxes.
This penalty is part of a $50 million payment that BDO has agreed to pay the United States in connection with the filing of an Information charging the firm with one count of engaging in a tax fraud conspiracy from approximately 1997 to 2003, and a deferred prosecution agreement with the United States for the criminal charge if specific conditions are met.
In addition to the civil penalty payment, BDO has agreed to cooperate with the IRS in civil matters, including IRS audits and litigations relating to its tax shelter products, and to work with the IRS to ensure that it is in compliance with federal tax laws involving tax shelters.
"Today's enforcement action is another reminder that taxpayers can't hide behind complicated schemes or corporate tax shelters," said IRS Commissioner Doug Shulman. "The IRS is strongly committed to stopping illegal tax shelters."
The IRS is pleased with BDO’s commitment to cooperate with the IRS in civil matters involving tax shelters and to ensure that it fully complies with the federal tax laws involving tax shelters.
BDO USA is MHR's new accounting firm!
i'm guessing that the issue with auditor was the asset valuation. given the fact that the oil price is not as high as previous years, asset writedown will be necessary.
the issue is that it may trigger the contigent liability on its debt covenants.