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  • Pernix Therapeutics: $3.25 A Share Is Too Cheap [View article]
    Greater than 50% of PTX's sales is now Treximet. Treximet is simply an expensive combination of two widely available generics (sumatriptan and naproxen). Naproxen is the same thing as Aleve. The silly notion that you can combine a couple of cheap generics into an expensive brand name drug, while doing no R&D whatsoever, is now, thankfully, a thing of the past. If you want to invest in healthcare, invest in companies that are doing real R&D, and developing unique drugs.
    Nov 11, 2015. 01:40 PM | Likes Like |Link to Comment
  • Horizon Pharma: Business As Usual [View article]
    Longs will tell you it's false. Shorts will tell you it's true. The answer lies in the middle, which I submit is a reason to stay away from this company and any other pharma company that peddles drugs that are nothing but overpriced cocktails of cheap generics.
    Nov 11, 2015. 10:23 AM | Likes Like |Link to Comment
  • Pernix Therapeutics: $3.25 A Share Is Too Cheap [View article]
    The equity value of PTX is probably worth $0 in the long-term. If you like PTX's products, buy the debt, not the equity.

    EBITDA is meaningless here for an equity owner because they have large interest and debt expenses. PTX has over $300 million in debt, and does not cover debt service costs (i.e. they have no coverage). Even if you want to use EBITDA as a valuation tool, you need to look at Enterprise Value to EBITDA. In this case, EV is $500 million and they expect $30 to $35 million in EBITDA. That is 14X EV/EBITDA. Hardly cheap for a company that has nothing proprietary and has no real R&D (one of their main drugs, Treximet is just a mix of two widely available generics).
    Nov 9, 2015. 11:14 AM | 1 Like Like |Link to Comment
  • SolarCity Earnings Report Is Far Worse Than Management Commentary Indicates [View article]
    Just look at SCTY's interest expense per quarter and the ballooning debt on the balance sheet. Usually companies with these types of financial metrics would be considered distressed and headed to sure bankruptcy. SCTY will never be able to pay back this debt, and their only recourse will be to refinance the debt at significantly higher interest rates, further increasing financial losses! The only reason why SCTY trades for more than $0 is the Musk connection. Otherwise, it's clear the business is not viable, nor was it ever. This has been a game of financial musical chairs (to put it mildly) from the start, and it is finally unravelling.
    Oct 31, 2015. 07:45 AM | 3 Likes Like |Link to Comment
  • Pernix Therapeutics: Turnaround Under Way, Stock Still Under Industry Pressure [View article]
    Thanks for the comment. I really do like your analysis. Treximet is not "price gouging" per se when compared to the previous price of Treximet, but when you consider what the generic costs seperately, then the price of Treximet is absurd. Treximet is nothing but a combo of two drugs that are now generics. There is nothing special about this drug, whatsoever.

    The problem is that PTX is simply an "acquisition" story. There is no R&D. Nothing new or unique. Personally, I don't think companies like this will get much attention from investors anymore in the pharma space. It's not a viable long-term business model. All of these companies were simply trying to mostly replicate the VRX model on a smaller scale.

    As for the debt, PTX's only hope will be a refinance. But, if the stock is depressed and interest coverage remains low, you can bet the debt holders will put a lot of pressure on the company.

    Again, I see this a potential trade, as on some good news, surely the stock will pop. But, I don't see the long term value here (as opposed to something like Foundation, which has tremendous intellectual property, is a leader etc.)
    Oct 27, 2015. 07:32 AM | Likes Like |Link to Comment
  • Pernix Therapeutics: Turnaround Under Way, Stock Still Under Industry Pressure [View article]
    For the record, I really like some of your other ideas, but PTX has always been a head scratcher for me. The problem is that Pernix's drugs, especially Treximet, are nothing but combinations of commonly used drugs that already are available as generics (sumatriptan and naproxen) at a much lower price. This is right out of the VRX playbook. There is no R&D here, just acquisitions of niche drugs that don't really do anything different than cheaper drugs, and an attempt to raise prices. This type of strategy will get significant scrutiny from regulators and investors going forward. It's game over for these types of stories. That combined with the terrible balance sheet at PTX, would make me very wary of making an investment here. Maybe worth a trade on some bounce, but ultimately, I think PTX is headed to $0. Debt holders call the shots here.
    Oct 27, 2015. 06:43 AM | Likes Like |Link to Comment
  • Amsurg Is A Lower Risk Option In A Risky Market [View article]
    Any thoughts on the offer for TMH?
    Oct 21, 2015. 06:31 AM | Likes Like |Link to Comment
  • Something Is Indeed Terribly Wrong [View article]
    Mario Draghi is a Goldman Sachs alumnus, I believe. US central bankers are bit different, but many learned from Greenspan, who made his fortune as a consultant. The influence from Wall Street is palpable.

    Yes, I agree about Bernanke, though, and he has repeated many times the need for fiscal policy. Not sure about Yellen.
    Oct 7, 2015. 07:43 AM | Likes Like |Link to Comment
  • Something Is Indeed Terribly Wrong [View article]
    Nice article, but I'm not sure this is all the complicated. Most leaders at Central Banks, and in government, are schooled by Wall Street in one way or another. So they view the world thru the lens of finance, and are wholly ignorant (or purposively dismissive) of the fact that the real world economy (the production economy) is different than the financial economy. QE basically is a financial mechanism, and has no direct effect on the production economy, as such QE is largely ineffective in reflating the production economy. I'm not sure this is a big surprise. QE is great for the financial folk who live in the financial fantasy world, but does little for the other 99% who struggle in the real economy.

    For a strong real economic recovery you need extensive fiscal stimulus, which provides direct investment into the production economy. Unfortunately, political leaders every where are still enamored with the myth of austerity and fiscal budgets (either due to Wall Street education or political biases), so it's been impossible to implement satisfactory fiscal stimulus anywhere in the world. Without fiscal stimulus and a large enough deficit (obviously the deficit can be shrunk with a recovery, but not before), it is simply impossible to jump start any economy.

    In addition to the problems mentioned above, in the US at least, there are other substantial social, political, and legal impediments to an strong economic recovery. For example, in the US, publicly traded companies divert excess profits into buying back stock, which does absolutely nothing for the real economy (share buybacks are just another financial transfer scheme). In theory, instead of share buybacks we could use various methods to encourage large companies to actually invest excess profit back into the business, which would help the economy. Other problems in the US, of course, include a takeover of the Republican party by a fringe right group of lunatics, which has made it impossible to implement any logical fiscal policies. For instance, recently the extreme right has simply closed the Ex-Im bank in the US, which is ludicrous on many levels, as any sane capitalist understands.
    Oct 7, 2015. 05:39 AM | 5 Likes Like |Link to Comment
  • Why I Am Becoming Bullish On Foundation Medicine [View article]
    Nice article. Foundation is a leader and very innovative company, and is surely a company to consider for long-term investment. The problem here is simply, pricing. The tests are now quite expensive, and unlike drugs which are unbelievably illegal for Medicare to negotiate, Medicare can negotiate pricing for these types of tests. So, I'd expect Medicare to negotiate for major pricing concessions for cancer genomic testing and for pricing pressure to be an issue every year, like it is for many other test categories. Additionally, internationally, the pricing for these tests will be much lower than in the US. So, overall you need to take pricing into consideration for future forecasts. That said, of course FMI could make up for large pricing declines with increased volume, but pricing fears may hold back shares in the near term. The other issue is that I expect significant competition for FMI in the future. Already many major hospitals (e.g. Sloan Kettering, MD Anderson) offer tests that compete with FMI.
    Oct 6, 2015. 07:37 PM | Likes Like |Link to Comment
  • Travelzoo CEO Loughlin leaving; chairman will replace [View news story]
    Finally! Now the stock may get interesting.
    Oct 1, 2015. 04:48 PM | Likes Like |Link to Comment
  • Lakeland Industries: An Excellent Business Available At A Discounted Price [View article]
    Sure, you can review Ansell's acquisitions in the space. I think their last one was Microgard, for a supposed 9X EV/EBITDA and nearly 3X sales.
    Oct 1, 2015. 03:33 PM | 1 Like Like |Link to Comment
  • Significant Downside As Lakeland Industries Up 70%+ In 2 Weeks On A Small One-Time Event [View article]
    LAKE TTM EBITDA is $16 million. Free cash flow (EBITDA-Interest less Cap-Ex) is $10 million a year (excluding non-recurring items). 6X EV/EBITDA is around $13. I don't see the downside. Plus, 6X is low-end, when acquisitions are done in this industry at 10X. The stock is up, not because of a one-time event, but because investors recognize that the company's turnaround is complete and the company has substantial growth opportunities over the next few years. I go thru some of these points in my article linked to above.
    Sep 30, 2015. 11:04 AM | 2 Likes Like |Link to Comment
  • Significant Downside As Lakeland Industries Up 70%+ In 2 Weeks On A Small One-Time Event [View article]
    You can read my reply to this article here:

    My price target on LAKE: $22.
    Sep 30, 2015. 10:53 AM | Likes Like |Link to Comment
  • The Drug Carry Trade: Valeant's Massively Leveraged Long-Short Strategy Is About To Unwind [View article]
    Bill Ackman is a billionaire. He lives in a fairy tale world, divorced from the reality of the other billions of humans who live on this planet. It would be no big deal for him if he got charged $10,000 a day for a treatment. He could afford it without problem. What does he care if he spends $2K a month on health insurance for his family and has a $10K deductible. For him that's dirt cheap. So he sees no problem with the VRX strategy, as he is blind to the travails of the rest of society.
    Sep 29, 2015. 05:02 PM | 7 Likes Like |Link to Comment