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Jeremy Johnson, CFA  

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  • Exxon: Please Lord, Don't Buy BP [View article]
    Everyone does not know this. And please don't reference studies without quoting them. Your first assertion is just false, option plans are dividend adjusted, it does not help to buy back stock versus paying a dividend.

    When the company buys back stock, you own more of the company afterword. How is this not equally beneficial to you then getting a dividend? If you really believed in the company you would be reinvesting your dividend anyways, or is it because you have a better use for the money? Then sell your stock and buy something else. Share buybacks are done at the top of the market because that is when cash flows are best, if a company relied more on dividends they would be raising them the most at the top of the market and may run the danger of having to cut them in a downturn or starve their business of cash to pay it. Exxon bought back tons of stock in 2008-2010 which coincidentally probably saved it from ever getting very cheap. It amazes me how people can believe that $5 billion can disappear into the aether if its a stock buyback, but is God's gift to man if it is directly put in their brokerage account.
    Feb 19, 2015. 01:40 PM | 2 Likes Like |Link to Comment
  • NewLink Genetics: Examining Likelihood Of Success In The Impress Trial [View article]
    You can't prove that and shouldn't assume it. Maybe it was true 10 or 20 years ago, but who knows today. Behavior changes based on information and patients and doctors around the world all have the same information today. Also, it is clear that there were people in that study with abnormal CA19-9. You can quantify what you are saying with data: LN+ and CA19-9>N and those were present in the study.

    People are living longer with PC for a simple reason, they are being slammed with erlotinib, cisplatin/oxaliplatin, nab-paclitaxel, leucovorin and irinotecan more than they ever were 10 or 15 years ago in salvage. The only thing NGL-0805 is definitely going to prove is that the SoC MOS is higher today than ever before.
    Feb 19, 2015. 12:53 PM | Likes Like |Link to Comment
  • Exxon: Please Lord, Don't Buy BP [View article]
    Are you trying to argue that share buybacks and dividends are not equivalent?
    Feb 17, 2015. 01:55 PM | 2 Likes Like |Link to Comment
  • NewLink Genetics: Examining Likelihood Of Success In The Impress Trial [View article]
    Your math is not helpful to explain JASPAC-01s 25.9 MOS. We don't know the CA 19-9 levels from that study. However, we do know that some part of the group had elevated CA 19-9 from page 116:

    http://bit.ly/1vTbWqL

    All this subgroup analysis applied to the Phase II is not statistically significant and yet it continues to be trotted out. 11 people in Phase II had high level of CA 19-9 and now because 3 more of them survived longer than expected the product is a likely to be effective? The case for owning this stock should no be built around extrapolations from the phase II.
    Feb 17, 2015. 01:46 PM | Likes Like |Link to Comment
  • How The Tesla Investment Case Had To Suddenly Change [View article]
    I drive in one regularly as well as lots of the competitor cars, the fit and finish of the interior is a step below high end BMW, Range Rover etc, maybe two steps (in fact certainly two steps below). The screen is pretty cool though if you are into that sort of thing. Personally would not like it, but recognize that many many people do.

    The best thing about the car though is the driving experience in city driving. It's quiet, has good torque and no engine vibration. However, in really hot environments some that goes away because the A/C is not as good as a top end ICE car (and is loud and vibrates).
    Feb 9, 2015. 02:31 PM | 5 Likes Like |Link to Comment
  • NewLink Genetics: Examining Likelihood Of Success In The Impress Trial [View article]
    The P2 study was too small to draw any conclusions from -- full stop. And the company has been highly selective in the data it presents from the study. They point to correlations where it helps them and drop them just as fast when they turn against them. The high dose groups survival has converged with the low dose, I can't recall how I inferred this, but it seemed pretty clear and yet the company stopped publishing any data on this. I GUARANTEE if the data was good for their story they would publish it. Again though, doesn't matter because it is based on 26 patients, if 3 people catch lucky breaks it skews the data badly.

    The 1 year survival in the S-1 arm of JASPAC-01, the most recent Pancreatic study with a large population, was over 93% with 200 patients. S-1 is just a 5-FU prodrug, nothing special. Depending on genetics, 5-FU, Gem or S-1 could produce these results, so it could be with the 26 people in the high dose in P2, you had the people with the right genetics for the chemo agents being used. It's just random chance.

    By the way the Gem arm of JASPAC-01 with LN+ of 62% had 25.9 median survival and 3 YR of 39 or 40% (just looking at the graph). That is right on top of P2. I'm not going to argue patient populations -- its just going to get lost in the noise of having a small population in the P2, you are talking about analyzing the results of *3* additional survivors based on the difference in LN+ (assuming LN+ 20pp higher and 2x survival rate of not being LN+).

    I also find it interesting that the CFO was kicked to the curb. Maybe he wasn't comfortable with the selective disclosure.
    Feb 9, 2015. 01:31 PM | 1 Like Like |Link to Comment
  • Amdocs: A Cash Machine On Sale [View article]
    I didn't say anything about them losing market share historically. The worry is that in software new entrants can come quickly and establish rapid market share gains. Happens all the time, the usual response is for the dominant player in the industry to just buy any new competitor. That is why free cash flow looks so great at so many tech companies until you look at the acquisition line. Right now, Amdocs appears to have this under control, but in the future that can change. Picking stocks is not as easy as buying anything with a FCF / Capitalization ratio greater than the market.
    Dec 18, 2014. 03:46 PM | Likes Like |Link to Comment
  • NewLink Genetics: Examining Likelihood Of Success In The Impress Trial [View article]
    Went through pretty much all the analysis you have done myself some months ago but I see two issues. First is the treatment group: it is only 69 patients, so we are trying to extrapolate an improvement versus base line when we could just be looking at statistical noise. It is just a matter of 3 people living longer than expected which could be accounting for the difference.

    Second is the control arm. In JASPAC-01 which is the most recent large trial the median survival in the Gem arm was 25.9.

    http://bit.ly/1z9lJch

    LN+ was 62% in that trial, a bit below RTOG and I can't find a 19-9 number.

    However versus RTOG, I think SOC FOLFIRINOX in 2012-2014 timeframe could easily add 2 months, and I think Dr. Link has referenced in or around this number. I have looked at various studies and independently agree.

    From the standpoint of an investor, I would have to use 23-24 months MS control to get comfortable with owning the stock.

    Back to the first point, I think the 95% CI on 3 YR overall survival for NGL-0205 (Phase II) of 39% is probably 10+ points either way (it was 7 points either way for ~180 patients in JASPAC), so the 3 YR could easily be anything down to 25% and be consistent with the data statistically. So really extrapolating from the Phase II is just noise. Based on some commentary I have seen I think that this Phase II was purposefully underpowered by management so they could leave the door open for a Phase III and I believe this is common in the industry where management doesn't believe in the product.

    Having said all that I think there is a good chance the final analysis will show a greater than 20% improvement, but I have serious doubts as to the 30% improvement in the second interim. I did own the stock from the low-20s to the high-20s because the valuation made sense for the risk -- since that time of course Ebola has created some noise in the name and the company avoided having to raise equity in the public markets by selling IDO -- all good things that have built real additional value in the stock but not really germane to algenpantucel. Now the value will be driven solely by this 2nd interim and I think the chances are low it will clear the bar.

    I would like to see your analysis on the timing of 1st and 2nd interims updated for a 24 month control.

    Thanks for the article.
    Dec 18, 2014. 03:28 PM | 1 Like Like |Link to Comment
  • Amdocs: A Cash Machine On Sale [View article]
    Love this company, have owned it from the mid-30s. Two things give me pause: 1) customer concentration, 2) new competitors: can't recall all the names but have read about a few startups that are nibbling at small portions of their business. I don't really know their products that well, but in software I get a bit nervous that companies don't invest enough to keep their offerings current. They can do it because maybe 2-3 companies dominate the market they are in, but it leaves the door open for new entrants.
    Nov 20, 2014. 10:43 PM | Likes Like |Link to Comment
  • Now Is The Time To Buy Travelzoo [View article]
    You have to trust the people you invest with -- that is they have to be credible and have character. I am not sure why anyone would trust Bartel at this stage. His management of this company has been a seriously lacking. I see from his bio, he has two masters degrees and two phds -- I think we can deduce that his priorities are elsewhere. This may be his craigslist.
    Oct 24, 2014. 09:17 PM | Likes Like |Link to Comment
  • GoPro: Fully Diluted Market Cap Is Really $10.4 Billion - Stock Could Fall 75%+ [View article]
    To get the enterprise value or market cap of a firm with stock options outstanding you add the fair market value of the stock options, you don't multiply the number of options by the current share price.
    Sep 11, 2014. 12:53 PM | 1 Like Like |Link to Comment
  • Chipotle Customers Might Not Have Said 'Yes' To Higher Prices [View article]
    Yes, they are all over Southern California. I was discussing with a friend yesterday, the food used to be better but they have migrated over the years solidly into the value category, at this point it is really no different then going to Del Taco or Taco Bell for the most part, but it can be a bit healthier. The menu has migrated over time though and a lot of people I see at El Pollo Loco order the prepared items as opposed to the chicken pieces.

    Chipotle is a different class of restaurant. I am not sure how they do it but in some way Chipotle manages to deliver a slightly and noticeably higher quality of food for roughly the same price or just a bit more than "fast food" (outside of $1 menus which face it get pretty boring and are not very profitable). And the restaurant is much nicer inside, the employees more friendly (and more of them per customer) ... really when deciding where to eat there is never a debate between those two places with people I know.
    Aug 5, 2014. 12:34 PM | Likes Like |Link to Comment
  • Chipotle Customers Might Not Have Said 'Yes' To Higher Prices [View article]
    Been eating El Pollo Loco on and off for 20 years, Chiptotle has nothing to fear from them. The chicken at El Pollo Loco is decent, but every other ingredient is at or below the level of Taco Bell.

    And the only reason to go to Qdoba is to get the queso or if the line at the Chiptotle around the block is too long.
    Aug 4, 2014. 10:25 PM | 1 Like Like |Link to Comment
  • Rocket Fuel's Fall From Grace May Be Temporary [View article]
    It's a perfectly viable strategy to reinvest your net income in expenses such as marketing and R&D in a business like this. In fact, you will probably be forced to by competition. The time to milk this company for cash flow or net income is not now.

    But yes it is a binary outcome for this company in all likelihood, it will either be a market leader in the industry or it fall to the wayside and its valuation will follow.

    I will not be the long-term investor that finds out and I suggest if anyone is not fairly knowledgeable about the intricacies of the industry and have some glimpse of the transaction level economics that they stay away.

    And please, try to win your arguments on the merits rather than slandering me by comparison to a sell-side analyst that sold himself out.
    Jul 30, 2014. 02:52 PM | Likes Like |Link to Comment
  • Declining Propane Demand Will Eventually Threaten AmeriGas' Dividend [View article]
    Working capital was a $90 million use in 2013. If you look at the accounts the moves are not large are confined to a modest rise in A/R and a decline in customer deposits. The company should not manage the distribution around changes in working in capital. The company produces all the cash it needs and more from operations to fund the distribution. No one should have an issue with them drawing a bank loan or using excess cash to fund small changes in working capital -- some of which may be due to the prior year's acquisition.
    Jul 9, 2014. 12:11 PM | Likes Like |Link to Comment
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