I think we all know Q3 was good based on the divvy and cash announcement but I believe it will be very strong based on that change in cash balance. yes many assumed this also from the cash balance but I thought I would try and estimate a reasonable profit range to give us more confidence with this assumption
cashflow = profit minus use of cash and plus sources of cash all from operations, investing and financing activities
thus when we know change in cash but not profit , to find profit = (change in cash) add use of cash and deduct source of cash ( the opposite of determining cashflow)
1. change in cash = $111M for the period july 1 - October 4. reduce to approx. $106M for just 3 mths
2. dividend was 14.5M (use of cash) - thus add that back to cash change
3. first 6 mths of year (cashflow statement filed with SEC doesn't break down to just q2) saw a source of cash from financing of approx. $5M for income tax benefit for share based compensation - thus will deduct $3M for Q3 from change in cash figure
4. depreciation/amortization and share based compensation (both non cash expense thus a source of cash ) of say $10M ( bit more than in q2 due to higher amortization due to synacthen deal ) - so deduct from cash change
5. q1 and q2 saw cash raised from share issuance of approx. $7M ( stock options and grants I suspect) - don't have breakdown for just q2 as again cashflow statement uses just 6 month period but would assume it was bit higher in q3 than in either of q1 or q2 with the climbing stock price so lets use $5M for q3 ( this is very hard to estimate mind you ) - thus we deduct $5M from change in cash
using all the above calculations PROFIT = $102.5M ( 106 + 14.5 - 3 - 10 -5 )
if WC in fact increased by $10M, then non gaap will = $1.95, if WC decreased by $10M, then eps non gaap = $1.63 , I am simply providing the expected ranges here showing most likely worst case we get 1.63 in non gaap and likely best case 1.95 but im using right in the middle of $1.79 as it is so hard to predict that WC figure and other assets and liabs like accrued share based compensation.
not sure if Medicaid adjustment will be used in Q3 (anyone confirm) , q2 was $7.7M or $0.13 - was that just a one time thing in Q2?
with Medicaid adjustment non gap middle of my range goes up even further = $1.92 ( 1.79 + $.13)
but lets just use $1.79 then ( to be conservative) for again a 40% BEAT!!
traditionally Q3 has been qcors biggest quarter to surprise on the upside with a 26% beat in q3 2012 and a 42% in q3 2011 ( 2 biggest beats by qcor to date) so this is further evidence of a strong beat in q3 2013
I know many likely just assumed the q3 eps would be strong with that cash balance figure but just wanted to dig deeper and see possible best case and worst case scenarios (knowing I have had to estimate some things) and knowing that that range of mine is certainly not 100% guarantee but I do feel pretty confident with my quick and dirty analysis that Q3 should be a beat by 40% and worst case by 27% (1.63 vs 1.28) so this might lend extra comfort for some if they want to hold through ER or possibly increase their positions before ER (although Monday and tuedday were great days to add but it isn't too late). of course no one knows how the stock will react but the stock increased by 22% (open to close) the day after their q2 20% beat. Now we are talking beat twice that at 40% so I would expect at least a 20% move and maybe a 30%. assuming a close of 68 before ER , a 20-30% range will land the stock at a $81- 88 range.
1. no share buy back but remember if there was thi
some assumptions to analysis:
1. no share buy back but remember if there was this would be a use of cash and thus would be added back to cash change to get profit, thus profit will be even higher than the NON GAAP $1.79 if there was a share buy back not to mention eps NON gaap would go up in addition to dollar figure add back due to less shares outstanding
2. no fixed asset sales (source of cash) that would therefore need to be deducted from cash position - odds are high there were no fixed asset sales - prop /pplant and equip are only 6% of total assets anyway
I will also do a different 2nd analysis later tonight to cross check/verify my first analysis and its eps range.
now what about working capital (receivable , inventory, payables , ect) affect on cashflow. well looking at past 5 quarters the variance (max amount) is about $10M in either cashflow used or generated from changes in w/c. that said, with sales increasing, investment in w/c normally increases and this is a use of cash so odds are good that w/c actually increased thus needing to add this back to cash change and in turn increasing profit. in fact last q3 2012 saw a big increase in WC of apprx $15M mainly due to AR increasing by $15M so for the sake of a larger profit lets hope we saw the same in q3 2013. remember if WC goes up by any amount , then we add that back to cash change to get a bigger profit.
so our estimated profit variance including working capital is now 102.5M + or - $10M or 112.5 M ( $1.83 eps GAAP fully diluted ) or 92.5 M ( $1.50 eps gaap fully diluted) but again more likely 102.5M and maybe even above as normally w/c will increase when sales goes up and sales went up a lot in q3 we know. so my downside is 92.5M and upside is 112.5M but lets just use 102.5 M then for profit
$102.5 M profit ( assumes WC change is $0) = $1.66 eps GAAP fully diluted using 61.5M fully diluted shares - same as 3 mths ago - could be bit higher for q3 - maybe 500k with stock based compensation
NON Gaap we add back approx. $0.13 in deprec, amortization and share based comp estimated for q3
NON GAAP= $1.79 vs estimate of $1.28 for a MONSTER beat of 40% !!!
last time stock fell 25%
this time just 5% lmao
and no follow through today either lmao
last time shitron hit stock was 57 but trailing eps was under $2
this time stock was 58 but trailing is 4.8
no wonder it didn't have much of an effect
guess the bozo #$%$ bag snake mr left didn't realize cashflow has more than doubled since his last raid
now that his single digit stock prediction was so wrong, he has now turned to single digit pe lmao
guess the bozo #$%$ doesn't realize qcor already trades at single digit ex cash and using 2013 $5.8 non gaap ( 56-6 cash / 5.8 = 8.6x. ok wanna used trailing of 4.8 , then pe is 10.4x
stock at 55 here is an equivalent of around $25 if we were back in fall 2012 ( trailing in fall of 2012 was $2.2 now $4.8 . 2.2/4.8 = .456. stock of 55 x .456 = $25
added trading shares yesterday at 55.9
will look to sell some puts soon too as the premiums are drippin juicy
ya i thought Medicaid was one time but thanks for confirmation mikey. so it stays at 1.79 non gaap
ya expectation but doesn't mean they actually did the buy back but my $1.79 non gaap doesn't account for that. any buy back would then bolster higher the 1.79 figure due to the actual cash outlay as well as slightly lower shares outstanding in calculating eps
but based on that already BIG cash change I cant see them buying back cause even buying 500k would cost say $30M at avg $60 price and then my non gaap middle of the range would rise to $2.30 !!! possible i suppose and would love that but i am just not counting on that... sure gonna be fun and exciting!
and 17-21 was even below where I first started buying at 25
ttm eps was 2.2 then
now 4.8 eps
2.2/4.8 = .458
21/.458 = $46 + $5 more in cash /shr than in sept 2012 = $51 (price now)
if use 5.8 ttm ( coming in 1-2 mths) then trading at $17.5 ( 2.2/5.8 = .378) 17.5/.378 = $46 + $5 cash - $51 ( price now)
extra risk is expanded investigation vs then
but all the qualitative factors Pensive outlined more than make up for that added risk....here they are from his post:
2. Synacthen was a nagging issue in the minds of some as a competetive threat, but now Q owns QCOR rights for N.America and any FTC scare tactics are not substantive (no FDA approval, no current sales, different chemical composition).
3. No dividend then. Now we have a dividend and it has been raised twice.
4. Cash position is much greater than a year ago.
5. BioVectra mfg has been purchased, reducing if not eliminating fear of no process exclusivity and confidentiality.
6. Many new studies and treatments under review in MUCH larger patient populations.
it is pretty disgusting, the worst I have seen in my over 20 years at this
pe now back under 10 where it was last fall when stock was in 20s
but of course we all know this.....
Been a little under the radar here last few months but still have my core shares from $26 and my jan 14 leaps ... so sweet
I did have a $65-70 target for year end I set last Feb although i did say then that 80-90 was possible if the stars aligned and it looks like they have. I was close to selling it all at in 65-70 range after q2 release but I decided not to as I believe as many here do that back half of 2013 will be very strong and it does look that way with Q3 based on baily's comments.
I did some analysis on that change in cash balance and how that can be translated into a profit range... stay tuned
Shorts got bent over ( ! ) hard today i see... nice....they better get used to it as more pummelling is on the way next week!!!
Big Sack Patty
in just 2 mths time... qcor will have close to $8 of cash/share and will have approx. $5.8 eps non gaap
we now have to start valuing qcor on a cash adjusted basis
thus , say assuming price is still 60 by end of year, price less cash = 52
52 / $5.8 eps = 8.9x multiple and that is on TRAILING eps
yes pe has been as I have noted and will continue to be low due to increased risks (even if just perceived again as I noted last feb) but sorry 8.6x is just reeeee #$%$ uuuu lous .
current p/e using trailing 4.8 eps and taking out cash of $6/share = 11.2 x ( 60 - 6 cash / 4.8) - again too low
pe of 15 is warranted here. I was getting more comfortable with a 15-20 pe range but not so now with the investigation ( again more perception than anything else) as like many here I believe worst case this is a fine of $400M and more like $100-200M which is peanuts for qcor as that is like $2-3 of cash/share
so 15 pe x 5.8 eps for 2013 = 87 + 8 cash = 95
even with a $400M fine, cash/share to pay is $6.5 so then fair Value = $88.5 ( factoring in the investigation risk)
FAIR VALUE early next year in Feb based on actual 2013 results and discounting a big fine is $88
stay the course longs !
big sac patty
it just amazes me with all the chances the shorts have had to escape and they just refuse to cover and move on, well some have as SI is down from the 30% days and we are likely getting new shorts each time we go higher but still, just take a look at the chart and fundies (still undervalued) and why anyone is shorting here is beyond me. seriously, shorts have had their faces ripped off not once , but twice ( 35 - 50 in 1 day , 53 to 68 in 1 day) so why the hell would you even want to partake on the short side after seeing what has happened and can still happen.
Like others have said before, likely a good chunk of hard core shorts who just refuse to give in and it has become personal now.
how many shorts were there before Q2 ER?
2013 executive performance equity grants will have no vesting with 2013 Operating Income growth of less than 50%, and full vesting only if Operating Income grows at least 100%, using the 2012 baseline of $296M.
Source: Q1 conference call replay at time marker 25:17.
50% growth threshold = 296 x 1.5 = 444M less 35% tax = 289 M or $4.7 gaap
100% growth threshold = 296 x 2 = 592M less 35% tax = 385M or $6.26 gaap
non cash add backs to gaap is approx. $1 for entire 2013
Thus non gaap eps range is $5.7 - $7.26
Wow - that is higher than I thought. This means NO performance grants under $5.7 non gaap and then increasing vesting of between 0-100% up until $7.26 so Mgt has huge motivation to hit that 5.7 - 7.26 range and ideally higher than $5.7
Qcor has earned around $2.12 non gaap eps in first 6 mths so they would need $3.58 more in q3 and q4 combined to hit $5.7 and $5.14 to hit $7.26.
That $3.58 would be say 1.65 and 1.93 in q3 and q4 hypothetically speaking
and that $5.14 would be say $2.2 and $2.94 in q3 and q4 hypothetically
if we use mid pt of 5.7 and 7.26 which is $6.48 then qcor could hit that with say $1.9 in q3 and $2.46 in q4
These performance thresholds seem high but would seem odd qcor would set such unattainable targets as they know their business better than anyone and executives do like getting their bonuses or at least a portion of it , so one could conclude then that Qcor just might in fact have a BLOW OUT LAST 6 MTHS - I mean even bigger than most here think with their 5.5- 6 non gaap range. Qcor needs to get well into the 6's here to get some meaningful bonuses.
Analysts have a $4.8 2013 eps non gaap estimate and we are half way through so to even just hit the low range of $5.7, that is a $.45 beat in each of q3 and q4. q3 estimate is 1.3 so a $.45 beat is $1.75 , close to my $1.79 mid range from my cash balance analysis.
This should be fun!!!
great eps release - just too bad had had to be tarnished by more BS and the timing of this just reeks of shorts being in on it , cmon a day or 2 before a stellar eps release - that is NO coincidence if you ask me
great call max - 3 cents off - impressive
I got my range correct with my cash analysis (1.63 - 1.95). I wasn't trying to predict the actual eps but more so provide a range with some confidence based on that cash balance we saw and the range was indeed hit so I will call it a success.
anyway, fundies and cashflow generation always rule in the long run so this lastest investigation news shall too pass
this would be and is worth $80 based on fundies and solid q3 so at 63 ( $1B was chopped due to investigation news) way too much here . rememeber when this first was announced 1 year ago, only 650M of mkt cap was wiped off so it is almost twice that and it is the same old investigation, albeit yes expanded but which will likely not lead to much if you ask me. as well, qcor is twice the size it was 1 year ago and generating well over twice as much cashflow so a $1B chop is simply uncalled for.
oh and rememeber that q1 ER $5 drop in AH from 30, was back at 34's in 3 days and that was a bad miss.
I agree with Indy and other posters that AH vol and trading behaviour did not match a true 10% drop, you could see it was fabricated and orchestrated by the shorts just like Q1
and this board is a zoo tonight
deep breath everyone