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Omeros Corporation (OMER) Message Board

neil_willoughby 1 post  |  Last Activity: 3 hours ago Member since: Mar 1, 2009
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  • Pros:
    1) Earnings yield: 26%, based on todays price per share
    2) No debt - cannot go bankrupt
    3) Respectable EPS for the last 6 years - profits every year and rising mostly

    2008: $0.7
    2009: $0.72
    2010: $1.34
    2011: $1.77
    2012: $1.93
    2013: $1.87
    6 year average: $1.29 EPS

    4) Nice rising equity every year
    5) Macro economic strong for China in general. Copper should be in demand.
    6) Stable predictable business, good tangible assets, awesome discount to book value (!)

    1) Gross margins declining for 5 straight years. This is likely why the price per share is suffering (why are margins deteriorating - anyone?)
    2008: 33.6%
    2009: 22.4%
    2010: 16.8%
    2011: 11.9%
    2012: 10.5%
    2013: 9.5%

    2) Zhu is terrible at communicating with shareholders.
    3) Chinese RTO - perceived as risky along with other Chinese RTO
    4) Capacity of business limits upside for future
    5) No strong patents yet, competitive advantages a little unclear

    Possible catalysts to upside:
    1) Institutional investors buy the stock and bid it up to fair P/E levels
    2) Zhu takes it private or moves it to another exchange, with a good buyout offer to present shareholders
    3) Chinese economy surprises to upside and copper price spikes, creating demand for LIWA's lower priced alternative products.
    4) LIWA gets acquired at premium
    5) US investors once again favor Chinese stocks, leading to a return of the frenzied buying of 2004 and 2005.

    Possible threats:
    1) Chinese government restricts operation somehow, possible through land rights or environmental permitting.
    2) Zhu, while already a terrible communicator with shareholders, mis-executes with the business creating more problems.
    3) If Zhu is married to COO, then business is a mom and pop shop. Amateur results moving forward. (any info on this?)
    4) China drops into recession

    Buy and hold, it's worth the risk. Let LIWA continue to produce for you year after year. it's China! Zhu is a Chinese operator not a slick USA style CEO. Stay on the bid!

11.27-0.06(-0.53%)Apr 17 4:00 PMEDT

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