I want to buy back into ESV and SDRL as well, but until I start to see day rates start to go back up, it is just too dangerous right now. I suppose that if you want to dollar cost average, you could buting a 5% per month for the next 20 months. Surely, day rates will reverse by 2017.
You have been posting that it is undervalued for well over a year; yet, we have not seen a $15+ price in a long time. What do you consider a fair value for the stock and when do you expect it to get to your fair valuation?
The entire offshore drilling industry is out of favor. I was out of town when SDRL announced an elimination of their $4 dividend and the stock got crushed. I expected ESV to cut their dividend in half to $1.50. The cut to $.60 was unexpected. I expect NE to cut their dividend as we continue with the industry downtrend at least through 2016. Day rates have dropped for new rigs from apprx. $675,000 per day to $400,000. This low level does not give the drillers a high enough return to justify the large capital expenditures. I expect to see some consolidation. Eventually, the supply will come down and the demand will increase forcing crude prices back up, but this will take some time. The problem is at what price do you buy back into the drillers? You estimate is as good as any. Since I do not know, I am charting the stock and the price of oil. If oil does not retest earlier lows, then it is safe to buy and you should start to see higher lows on the ESV chart. I am on the sidelines gathering data at this point. Good luck and thx for your post
I understand, but it is safer to buy after the turn when the big money managers start to pile on. Right now, oil inventories are still increasing and you are guessing where the bottom is. You might pick the bottom or you might just catch a falling knife
You are correct in stating that the shorts are in control of the share price. I do expect a price spike when we get some Triferic license agreements signed. The Barean Capital analyst that has a sell rating on the stock does not feel that there will be a big market for Triferic. Inking some license agreements would lessen his effect (hopefully)
Until you get something concrete from license agreements and the launch of both Triferic and Calcitriol (June-July), I don't expect any big price moves.
Stocks always go down faster than they go up. Ensco has always been a solid, reputable company and it is sad to see the share price decimated. I was lucky and sold my shares for a loss at $33. I still believe that oil prices will rebound at some point, but it sure looks bleak for the drillers for at least the next year. The storage facilities in Cushing and other places (ocean cargo ships) are filling up. At some point this supply of oil will hit the market. Until global demand picks up and oil production decreases, this excess inventory will not be absorbed. In fact, many are preciting that the oil inventory will continue to grow for at least a few more months. I will buy ESV again, but will not until the inventory of oil starts decreasing for fundamental reasons. It is much safer to buy on the way up instead of trying to hope to catch a falling knife
I expect the profits to come and I believe in the products but this is a small company and a lot rides on the CEO. I don't expect anything bad to happen, but unexpected events happen all the time. I would feel much better if the CEO had a bigger company (like Baxter) with a team in place handling the launch of Triferic. Our CEO is going to be wearing a lot of hats in the next few months. I would feel a lot better if he had a marketing guru on board that had experience with new product launches to assist for at least the next 3-4 months
There is nothing to move the stock price until we get license agreements and product launches. The CFO stated in the last CC that we would be profitable as soon as Calcitriol sales begin. Until then, we just bounce along with nothing really to move us higher
Personally, I would like to see a Baxter buyout, but I doubt that it will happen. This company only has 283 employees and they are relying on the CEO to direct sales to the biggest customers for their new products. They are small and if the CEO had an unexpected health issue or an accident, the share price would probably plummet. This is a small company with a lot hinging on new product launches. I see the positives outweighing the negatives and I will be happy when product launches are announced. Until then, I am holding
I expect the share price to just drift along until we get a license agreement...hopefully soon. It would be great if Calcitriol and Triferic could be launched before June. That would certainly make some shorts cover
This is from page 10 of the 10k:
Distribution and Delivery Operations
The majority of our domestic products are delivered through our subsidiary, Rockwell Transportation, Inc., which operates a fleet of trucks used to deliver products to our customers. Rockwell distribution and delivery will continue to operate under the Distribution Agreement on behalf of Baxter for domestic business. We perform delivery services that are generally not available from common carriers or our competitors, such as stock rotation, non-loading-dock delivery and drum pump-off service. As a result, we believe we offer a higher level of service than other providers.
Sales and Marketing
The ten largest dialysis providers treat approximately 396,000 patients according to an article published by Nephrology News in 2014, which we believe constitutes over 80% of the hemodialysis patient population in the United States. Due to the concentrated nature of our customers, we will market our drug products using few salespeople. Our Chief Executive Officer leads and directs our sales effort, and handles our major accounts.
You are correct, RC is the chief sales contact for major accounts
My point is that if RC does not want a Baxter buyout, it is not going to happen unless it is extremely lucrative. The share price performance looks like it is dependent on Chioni's ability to get Triferic and Calcitriol accepted in the market i.e., it is all up to RMTI's ability to execute
It looks to me that the Board has the ability to "block" a buyout by issuing a special class of preferred stock
This is from page 28 of the 10k:
Structural and anti-takeover provisions reduce the likelihood that you will receive a takeover premium.
The Board of Directors has the authority, without shareholder approval, to issue shares of preferred stock having such rights, preferences and privileges as the Board of Directors may determine. Any such issuance of preferred stock could, under certain circumstances, have the effect of delaying or preventing a change in control and may adversely affect the rights of holders of common shares, including by decreasing the amount of earnings and assets available for distribution to holders of common shares and adversely affect the relative voting power or other rights of the holders of the common shares. In addition, we may become subject to Michigan statutes regulating business combinations which might also hinder or delay a change in control. Anti-takeover provisions that could be included in the preferred stock when issued and the Michigan statutes regulating business combinations can have a depressive effect on the market price of our common shares and can limit shareholders' ability to receive a premium on their shares by discouraging takeover and tender offers.
The total market for Calcitriol sales is about $200 million. I have previously read that Triferic has a potential annual sales of $600. With reasonable margins, shouldn't RMTI have a potential to get $2.00 eps by 2017?
Unless I'm missing something, this stock is way undervalued if RMTI mgmt. can execute successful product launches
I read where mgmt. estimated total Calcitriol sales to be about $200million, but did not read anything about mgmt.'s estimate of annual sales for Triferic.
Also, I read where the CEO would be the sales lead for the big accounts
I did not see a discussion of the noncash compensation charge of $2.4 million that was discussed during the CC.
This was a lengthy document and if someone spotted anything in the 10k relating to the above, please post the 10 k page number or exhibit number
Is this statement from the 10k just "legalese":
Although Calcitriol has been approved by the FDA, we may not be able to commercialize it successfully.
We have received FDA approval to manufacture a generic version of Calcitriol, but we still must meet certain ongoing regulatory requirements for product testing and stability of our commercially marketed products. If our testing does not meet approvable standards, if we are unable to find one or more approved suppliers that can make the product in sufficient quantities or if we experience operational issues with our supplier, we may not be able to market Calcitriol or the launch may be delayed.
The market for generic drugs such as Calcitriol is generally very competitive, which may make it difficult for us to capture significant market share. If we have success in capturing market share with Calcitriol, it may attract other entrants to market their own Calcitriol product, which could have a material adverse effect on our future revenues and results of operations. Branded competitors may aggressively lower their prices to maintain market share.
Is this related to the $2.4million noncash expenditure that Llema talked about during the CC?
Here is where Tom talked about it in the transcript:
Selling, general and administrative expense for 2014 was $18.3 million compared to $14.3 million last year the $4 million increase was primarily due to an increase of $2.4 million in non-cash equity compensation expenses, increased cash compensation of $600,000 and increased marketing, legal and regulatory expenses related to Triferic of $600,000.