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JDS Uniphase Corporation Message Board

rspiland3 67 posts  |  Last Activity: Sep 14, 2014 12:07 PM Member since: Feb 23, 2012
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  • Reply to

    Nx-1207

    by mhk_md100 Sep 12, 2014 11:27 PM
    rspiland3 rspiland3 Sep 14, 2014 12:07 PM Flag

    Thanks for the insight. I'm not a doc, but I'm curious about your comment regarding NX-1207 replacing invasive therapies such as PK TURP, etc. My understanding is that BPH patients usually try drugs first, then move on to more invasive treatments if there is no improvement. Assuming the unblinded efficacy and side effect data is good and the drug is approved, wouldn't NX-1207 be a preferable treatment option BEFORE considering the more invasive alternatives? Thanks again.

  • Reply to

    Holy S. TIS Suit is DONE!!

    by jorlev1164m Sep 8, 2014 4:08 PM
    rspiland3 rspiland3 Sep 8, 2014 4:25 PM Flag

    Clearing the decks of all litigation...should be bullish. IMHO MITK should have acquired TISA when the stock was at $6...global sales footprint, complementary business, a small profit, and one less competitor. Might still be a possibility, but need a higher stock price. With all litigation settled, it's all about fundamentals. If MITK can ramp up a little sequential revenue growth this quarter, it should show a small profit, and long-suffering holders might finally catch a break!

  • Reply to

    New Member

    by soyllo Aug 8, 2014 1:22 PM
    rspiland3 rspiland3 Aug 10, 2014 11:29 AM Flag

    Good point about fully diluted shares...will fix that. But I'm sticking with my $3,000 per treatment estimate for now, and I actually think both of our procedure numbers could be conservative. Good exercise though...

    Sentiment: Buy

  • Reply to

    New Member

    by soyllo Aug 8, 2014 1:22 PM
    rspiland3 rspiland3 Aug 9, 2014 6:25 PM Flag

    One more thing...I think these numbers are extremely conservative. If they get 20% penetration of the oral market, then peak sales would be $2.58 billon, NYMX revs would be $387 million, Net Income $217 million or $6.20 per share. You can play around with the numbers to get your own estimates, but if the drug is approvable, the stock is worth a LOT more. But the risk is that the drug is not significantly better than the placebo...that would suck.

    Sentiment: Buy

  • Reply to

    New Member

    by soyllo Aug 8, 2014 1:22 PM
    rspiland3 rspiland3 Aug 9, 2014 6:08 PM Flag

    Phase 3 trials have been completed and interim safety and efficacy data have been released...all appears good. Unblinded data should be announced any time. Thing to watch is control group, because previous trials have shown an elevated response from patients receiving a placebo. If favorable results are released, expect an NDA within 3-5 months, and expect a U.S. licensing agreement with bigger pharma company. Under this scenario, they could receive approval in early-mid 2016. I think the most important data released so far has been the safety data, which was great. Even a mediocre efficacy result should make the drug approvable.

    The CEO owns 31% of the company, and there is at least one other strategic investor...don't know much about them. Management runs the company like it was private...won't talk about the chemistry of the product, potential partnerships, or the timeline toward approval. They have no interest in talking to Wall Street, because they don't need capital. But they have managed dilution extremely well compared with other developmental biotech companies. And as noted, interim data has been quite good.

    Assuming approval, NYMX addresses a huge market. Currently 3.3 million men take oral medications with mediocre efficacy and problematic side effects. Another 200,000 per year have surgery, and those numbers are growing. Importantly, urologists will get paid much more for administering this drug than they do to simply write a prescription...they have major incentive to push it! I've assumed they get all the surgery patients and 10% of oral patients, or 530,000 patients in total by 2021. If you assume the drug sells for $3,000 then peak sales could be around $1.6 billion. Royalties typically range from 13%-19%, so if you assume 15%, then sales should be around $240 million and net income $150 million, or $4.29 per share. A 15X multiple gets you to $65 in 5 years. Discounted at 25%, todays price should be $20-22. Hope that helps!

    Sentiment: Buy

  • Everyone knows this has been a brutal market for small cap stocks with no earnings. But in the past week, I have two companies whose managements are putting their money where their mouth is. Today after the close, it was announced that MM CEO Michael Barrett bought $1 million in stock on the open market. Last week, it was announced that two directors of PKT bought stock in the open market. In light of MITK's generous non-cash compensation to executives and the recent collapse of the stock price, it would be nice to see management buy some cheap stock with their own money! Mr. DeBello, are you listening?

    Sentiment: Strong Buy

  • rspiland3 rspiland3 May 13, 2014 1:22 PM Flag

    Further illustrates that there is widespread awareness of MITK's technology not only among financial institutions but throughout the technology universe. Although I have invested in MITK for expected sales and earnings, there is also significant IP value.

    If MITK can't monetize its technology, there is a high probability that the company could be acquired imo. Any of MITK's larger channel partners could be likely buyers...FISV, NCR, JKHY, etc. I particularly like the potential fit with ACIW. But as GOOG's participation here, almost any software could consider it. Founder and Chairman John Thornton is in his 80s; have to wonder how patient he is with growing this business.

    Sentiment: Strong Buy

  • Reply to

    Blended average price per transaction

    by ekretiree01 May 12, 2014 12:04 PM
    rspiland3 rspiland3 May 12, 2014 3:19 PM Flag

    Third try replying to this...maybe it will post this time...
    This math just doesn't yield useful info. The 18.3 bil check total includes not only consumer checks, but commercial and not-for-profit checks as well. Yet DeBello stated that "10% of consumers nationwide have tried it." He does NOT say that 10% of consumers use it on a regular basis. And he does not address commercial transactions at all. Further BAC's CEO Moynihan has said 10% of deposits by consumers take place on the mobile channel; he says nothing of commercial transactions, which are a large percentage of total check transactions. There simply isn't enough information to derive transaction totals or pricing from aggregate data, but blindly applying 10% to total annual checks is clearly mixing apples with oranges. At any rate, MITK has stated that the sliding scale starts at 12 cents per transaction for 1 million transactions, so a blended total of 2 cents sounds pretty far-fetched.

    A better way is to assume BAC is around 1/3 of all mobile deposits and is running around 165k per day. This would suggest a run rate of around 180k industry transactions per year (165k x 3x 365), and would yield $3.16 mil quarterly revs at 7 cents per transaction. This is consistent with recent quarterly license revs, so I am quite comfortable with it.

    Sentiment: Strong Buy

  • Reply to

    Seeking Alpha

    by douglasstein72 May 7, 2014 5:36 PM
    rspiland3 rspiland3 May 12, 2014 2:06 PM Flag

    This math just doesn't add up. 18.3 bil checks includes commercial for-profit and non-profit checks. DeBello has said that only 10% of consumers have tried it. He does NOT say the 10% of consumers use MRDC regularly, and he does not address commercial transactions at all. Further, BAC's CEO Moynihan says that 10% of deposits by consumers take place on the mobile chanel; he does not address commercial deposits, which are a large percentage of the total.

    A better way to look at it is to assume BAC is around 1/3 of all mobile deposits and is currently running 165k per day. That would yield 180k total industry transactions per year (165k X 3 X365), and at 7 cents per transaction, it yields $3.16 mil in quarterly license revs. This is consistent with recent earnings reports, so I'm comfortable with it.

    Sentiment: Strong Buy

  • Reply to

    Seeking Alpha

    by douglasstein72 May 7, 2014 5:36 PM
    rspiland3 rspiland3 May 12, 2014 10:31 AM Flag

    Actually, MITK would be pretty close to breakeven if not for the litigation expense...not bad actually. But regarding revs, first, remember that MITK books rev when they sign a deal. Then there begins 6-9 months of systems integration before the bank can even use those transactions. Only once the service is live, and all the initial transactions used, will they reorder and generate more revs for MITK.

    Second, Canterbury is right; top 10 banks probably handle about 85-90% of all check deposits. They are all live, and presumably reordering fairly regularly. But as reorders become larger, the price goes down a sliding scale...TO A POINT. As transaction volumes grow, and price per transaction stops declining, this business model gives MITK huge leverage to the success of mobile deposit.

    I do NOT agree with Canterbury that new products "cannot draw flies." It's too soon to tell, but early indications are that banks are quite interested, and USBank loves them. Further, if new products succeed, pricing is much more favorable to MITK. But importantly, new product revs are not included in any of the analysts' expectations (including mine.) Hope that helps!

    Sentiment: Strong Buy

  • Reply to

    Seeking Alpha

    by douglasstein72 May 7, 2014 5:36 PM
    rspiland3 rspiland3 May 11, 2014 11:48 AM Flag

    8 cents per transaction is an estimate. We would all like more transparency on pricing, especially since management used to provide an average per-transaction price. But we do know certain elements of the Mobile Deposit pricing model.

    The basic structure is a sliding scale starting at 12 cents per transaction for 1 million transactions over a fixed term. Price drops for more transactions; we don't know how low the per-trans price goes or how many transactions it takes to get there. Maintenance & Professional Services revenues reflect 18% of value of each contract, pro rated over the term of the contracts.

    Although this model leads to high variability in revs short term, over time it provides a lot of leverage to the success of the product. Over time, transaction growth and revenue growth will converge as price per transaction stops declining. I think 6-8 cents is a pretty good estimate of blended average price per transaction. So at 2.2 billion transactions and a 22% Net Margin, eps would be between $1.10 and $1.46. Importantly, these numbers reflect only Mobile Deposit and include zero contribution from other products or the developers forum. Hope that helps!

    Sentiment: Strong Buy

  • Reply to

    Seeking Alpha

    by douglasstein72 May 7, 2014 5:36 PM
    rspiland3 rspiland3 May 7, 2014 6:21 PM Flag

    I think this is a good article! Look, independent forecasters project between 1.6 and 2.4 billion MRDC transactions per year in 2016. Janney is using 2.2 billion. At 8 cents per transaction, that's $176 million in license revs alone. Add in maintenance & Professional Services, then revs should be north of $200 million. At a 22% net margin (which is middle-of-the-pack for software companies,) eps would be $1.46.

  • rspiland3 rspiland3 Dec 8, 2013 1:08 PM Flag

    Jefferies had been recommending a FNSR short based on long-term concerns about silicon photonics. Specifically, CSCO and others are known to be working on technology which would enable them build silicon photonics-based componentry in-house rather than outsource. Problem is that technology won't be commercially viable for several more years, and the migration to 10G/40G/100G is happening now. And by the time silicon photonics is commercially viable, FNSR will likely have a presence. Jefferies finally upgraded to neutral after the last Q beat expectations. Irony is that I heard they had recommended JDSU long as a paired trade...ouch!

    As an aside, Goldman raised his target to $27 Friday, but maintained a neutral rating as the stock was trading over $23 premarket. Friday's close at $21.82 represents 24% upside to GS target, so I wouldn't be surprised to see an upgrade. My own target is low-mid $30s within 12 months, based on 15-16X F2015 estimate of 1.85, excluding $3.05 cash on the balance sheet. Hope that helps!

    Sentiment: Strong Buy

  • rspiland3 rspiland3 Oct 19, 2013 11:13 AM Flag

    $2 billion would be around $19 per fully diluted PRKR share. Even a $500 mil award equates to almost $5 per share. But don't forget this suit only covers U.S. chip sales, or around 20% of QCOM's total chip revs. PRKR will also likely seek an injunction to prohibit QCOM from shipping products with infringed technology into the U.S. Such an injunction would provide a huge incentive for QCOM to settle globally. Finally, it is likely that QCOM has not indemnified phone-maker customers; PRKR could seek damages from them as well. Your $8-10 target sounds way too low, I think PRKR goes to the $20s, but it might take some time.

  • rspiland3 rspiland3 Aug 2, 2013 12:12 PM Flag

    Nice catch, thanks. Haven't seen DeBello in a conference since March, so he should have a lot to talk about.

  • Reply to

    MMs used to make it move up to get sales

    by mtheis17 Jul 22, 2013 9:42 AM
    rspiland3 rspiland3 Jul 22, 2013 11:16 AM Flag

    What a strategy! Makes way too much sense. I like people like dow and mtheis though, because they give me buying opportunities even though all the new information is positive. Oh look, I may have just bought the last of mtheis' position ahead of the earnings catalyst... lucky me!

    Sentiment: Strong Buy

  • Reply to

    court case

    by jpnmqrtn Jul 17, 2013 8:52 AM
    rspiland3 rspiland3 Jul 18, 2013 10:55 AM Flag

    Nice post, but I would offer a few additional thoughts. First, it's important to note that the USAA point man on the MITK relationship left USAA to head IT for another bank shortly before the contract was up for renewal. (One of many disgruntled managers to leave under the new management, I'm told. He also contracted with MITK almost immediately after joining the new bank.) I think the cost of migrating USAA to the next generation platform was more than $400K per. I heard it was more like several million, and the new liaison simply kicked it upstairs.

    MITK actually tried pretty hard to settle early...even replaced the head of sales in an effort to be accommodative. But attempts at settlement were one-sided, so MITK retaliated with charges under the Lanham Act.

    My view is that it was better to do the offering before the hearings ramp up this fall. Recall that hearings are scheduled for November. In the meantime, the additional $15mil gives MITK the horsepower to "go the distance" against a much larger company. If USAA thought they could impair MITK's business in any way or that MITK would simply roll over and acquiesce, then it's clear that they overplayed their hand. Because MITK's product is wildly popular with users, and the added cash ensures MITK can afford to pursue its own counter-charges. I think USAA has much more incentive to make a more accommodative settlement now that MITK has additional cash.

    Sentiment: Strong Buy

  • Reply to

    Why is this up

    by bigplay08 Jul 11, 2013 2:34 PM
    rspiland3 rspiland3 Jul 11, 2013 8:21 PM Flag

    Because it's grossly undervalued on the basis of future profits and cash flows. The real question is why has it taken so long to get started...$30 by year-end is my best guess.

  • Reply to

    Is the exercise priced in?

    by diwannewyork Jul 3, 2013 2:57 PM
    rspiland3 rspiland3 Jul 5, 2013 12:50 AM Flag

    I think Wikipedia's description is more accurate. Look a deal usually needs to be at least 2-3x oversubscribed to go up after pricing. When you see IPOs double on the first day, they are usually10-20x oversubscribed. In other words, the book runner has 10-plus mil shares in indications for every one million shares of stock. An extra 15% isn't going to keep the stock from going up. No one worries about a stock going up after a deal anyway, but the last thing a company wants is to sell even more stock at the discounted price.

    The more common problem with secondary offerings is that the stock breaks price to the downside, and all the buyers are pi$$ed at the company and the underwriters. The short enables the underwriters to support a cold deal with a "syndicate bid" at the deal price if necessary. But if the stock does not break price and instead rises, the underwriters can still cover the short by exercising the Shoe at the deal price. That's what happened with MITK.

  • Reply to

    Is the exercise priced in?

    by diwannewyork Jul 3, 2013 2:57 PM
    rspiland3 rspiland3 Jul 3, 2013 6:50 PM Flag

    Yes. It's a legal method for underwriters to stabilize new issues by shorting up to 15% of the issue on the offering. If a weak offering breaks the deal price, the underwriter can then support the issue at the deal price without losing money by covering that short. In MITK's case, the stock didn't break the deal price, so the underwriter can cover the short by exercising the over-allotment option. Google "Greenshoe" for a full description. This deal went fine; just needs to digest the new shares and wait for earnings.

    Sentiment: Buy

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