Yes it doesnt matter whether they earn $9 or $19 the PE will contract from current 26 to 12 once those earnings are realized as a lot is built in now into PE but price will improve. The income stream will build for a period of time and as it plateaus then gradually slackens the PE will drop regularly unless they get new deals for more revenue like a partnership for a cancer drug using their molecule.
you do realize that the spinoff will be a neutral event whatever the spin off shares are worth will decrease the value of PSEC and the only value is if the spin off goes up in value per share which is what PSEC expects but also that the new company will have more fees than now as they will have corporate expenses in excess of those presently. It will also not be a BDC so you will lose some tax advantages, It is not a free gift.
a very good first question, part of the answer is the increased sales diluted the carryover earnings in effect giving you negative income or loss of NAV the other answer is that the increased sales paid out high management fees but did little for share income in fact several quarters of higher payouts than income. bad loans to a small extent and contingent writeoffs. Overall the NAV will not change greatly in any direction unless there are substantial loan losses.
thank you for brfinging that up Phil, I have done that and it gives you an annualized return of 3% which is less than 1/2 of the S&P
he is not an investor he is a spammer or Ultimate Stock Alerts and he fooled you so maybe you shouldnt invest lmao.
the PE is high for what you have or low for what you could get.
high for the fact that all current income is one time events and currently not repeatable without new deals and none in sight Low for the fact that with FDA approval next month we get $9 per share in milestones and the beginning of royalties that by conservative estimates could be another $9 per share in revenue annually for several years givingf them funds if wisely invested could generate future growth. Their is not really any earnings growth as it is milestone payments that are not yearly income but one time items. so your analysis needs to take that into your calculations or figuring.
Sentiment: Strong Buy
think a little harder on that comment, if it was growing 400% this year but next year was going to grow a negative 50% where do you think it would trade PE wise. Once the royalties come in it will contract on PE while price is rising because after several years the royalties will plateau and start decreasing. the first full year of royalties with no milestones will be in neigh borhood of 12 to 14 PE without some more revenue streams on the future
that is all accurate but from experience I can absolutely say that my comments are accurate. Look at GILD currently growing at 400% YOY and trading at a PE of 12.5 with next yr growth at 25% more and this doesnt have the pipeline of GILD. ON the positive side it could easily double w a 12 pe next year but after that what will make it grow if it doesnt get more revenue generators. It can use the cash flow to develop or buy more but it will still have to do that. I say this realistically even though I am a bull and a owner. It is very common to see PE contraction on these types of stocks once earnings come in unless another huge revenue generator is on the burner You do realize that this does not men the share price is going down just PE as price and earnings rise because once the royalties start then the income will plateau and costs will increase and income growth will stagnate without other generators. having said that I bought with a goal of 115
a get srealistic PE will be 12 since this is a one trick pony for now, until they additrional income streams that would be high. But you say irt is higher now and that is on the speculation of FDA approval and a large pay day, the PE will contract and the price go up as that becomes fact. PE wont expand after that until more deals are inked and more income is foreseen IMO
IMO what we are seeing is a last quarterly earnings report that was below estimates because of Obamacare tax and very few considering that one time charge . with this quarters estimates continually dropping Both oyof these are having a chilling effect on the stock price which I feel are both incorrect and giving a good opportunity to new investors. I think if you take theh Obamacare one time tax charge out and raise estimates to the level I feel is appropriate that this would already be at 120 instead of 100 today. When the year end earnings come out in several more months and are well above current consensus you will see a significant rally in stock price. IMO year end earnings will be in the $8.15 to $8.30 range because of improved Harvoni sales and increases in the rest of their stable including a full quarter on their lymphoma drug which everyone seems to ignore because it will only have several billion in sales annually and is not as big as HVC but still a huge success. The low may not be in on this cycle as ABBV will get approval sometime next month but I dont feel that it will put a dent in Harvoni sales. They have to pay large royalities to ENTA and that will not allow them to cut prices too much. With all the politicalization on the $1000 per pill price when the govt is really only paying $560 is very ugly.
I made reas ons for why I got out then and they have been accurate to date
1) couldnt see this continuing the gain I had experienced the year before
2) it looked toppy and I saw it going sideways
Well now I do not see it going much higher from this level if not down until oil prices recover and during that previous timeframe if you had been a holder you missed out on 20% annual gains in the S&P I know you have gotten a great distribution that you have given back in stock price. Continue to be vigil and reevaluate your investments nothing is buy and put away and forget anymore. Even the GILD I bought last year is up for continued analysis.
What will make this go up 25% next 12 months if you dont have solid answers then I would look for another investment and in that 25% yield you can subtract your distribution. Personally if oil and NG prices continue down your distribution could be looking for a cut. When I first got in this it was 7 and there is no reason it could not see that level again if things continue to dissipate..
since then you have given all of your dividend back in stock price lost, you have loaned them your money for free plus paid taxes on what you got back. Such a great investment to hold. the two year down trend is intact. IMO the reasons are why I got out
1) selling below NAV
2) management more interested in management fees than profit per share
3) little reason for this to rally as there is no per share growth
4) eventually the bubble breaks in these types of quasi ponzi schemes IMO
5) sub prime lending or scavenger bottom feeding very similar to the sub prime lending in real estate that went south several years ago.
It is your money that you are lending and eventually losing if not actually losing as you have for the last two years then as a lost opportunity with S&P up over 20% per year and this going down.
actually all pipelines have to have govt approval, a friend of mine is in a natural gas drilling partnership and 2 yrs ago they hit one of the largest gas wells in history and they are two miles from a connection line and have not been able to get EPA approval to date and it has been two years. Obama is holding it all up by executive orders and EPA He only wants renewable energy such as solar and wind. There is also the connection to Warren Buffet and the fact that all current oil that would go through the pipeline is being shipped by rail on Warrens railroad and the contributions are keeping that pipeline from happening. The Liberals will continue to stop it until we have major pro blems or until the republicans can also get control of the WH and the Senate (2015) they will have 54 senate seats and only 6 demos will have to switch to get passed but without a republican in the WH it will get vetoed. The pipeline is dead for at least 26 more months.and so are the jobs associated with it.
would that be one share for each hand or how much are we talking about?? The comment really is meaningless. I bought all mine 22k shares at 74 and not backing up any more trucks.
lets see how you feel if they provided coverage for everyone that had hep C and you premium tripled and you had to pay for the increase because your employer would not then would you argue for full coverage if it cost you an additional $1000 per month out of your pocket??
here is my take, the stock is highly speculative with no income unless ABBV hvc is approved, when that approval arrives it goes up dramatically, if it is not approved it goes down dramatically, it is a risk reward situation at this point and how much you are willing to risk on a FDA approval, IMO the approval happens for the following reasons and go put it in perspective I am a large holder of GILD and also own some ENTA
1. the govt wants to HVC treatment costs down and you can only do that with competition
2. ABBV drug while not quite as good as Harvoni/sovaldi is still a great drug
3. CHPS has recommended it in Europe and almost all of their approval recommendations are followed with approval
4. If europe approves it, it increases odds that FDA approves.
IMO this will go up at least 10 to 20 dollars upon FDA approval announcement and if it only goes up $5 you had better load up the truck as all risk will be gone.