Actavis - A Potential Deal With Warner Chilcott Would Further Spur Interest In Actavis Itself [View article]
Actually, Actavis bid from Valeant and Mylan serves as a Proxy valuation for Taro which is trading at deep discounts to these valuations (trades at 5 times Q4 annualized EBITDA ).
crimson, another good indicator of fair value of taro, is taro's own historic multiple back in 2004 when taro was wall street friendly, having earnings call, going to investor conf, and the minority had no threats from the previous majority owner Levitt. TARO was trading at $70 per share back then . Take a look at 20-f's of 2004, 2005. The EV/EBITDA multiple was likely 15-25 back then.
what if the market price is manipulated ? right now largely wall street participantsare out of this because of 2 prior attempts by majority shareholder to buy at 5-6 times earnings , not presenting story in any investor conf, or having earnings call, not using 550m in cash opportunistically, ....but ultimately, they need to look at all strategic alternatives or pay fair multiples of peer traded companies or precedent peer transactions. otherwise my guess is the diff b/w fair value and any buyout offer will likely be extracted by minority institutions in a suit. just my opinion. plus, u are repeatedly ignoring minority protections
you said: Taro at a valuation of 18x ebidta is shooting for the stars.
1. Actavis(generic pharma) snubbed an offer that was 20 times EBITDA from Valeant (specialty pharma). Valeant is the most voracious acquisitive company I have known. They have made some 30 acquisitions in the last 5 years. I am 99% sure that if TARO is put on the block, valeant will at least offer 15 times EBITDA. Remember they also get synergy savings as well as all the new markets that Valeant could sell TARO's products...Japan, Brazil, Eastern Europe, China, India. My understanding is TARO is not yet making a big push in these markets .(maybe they were thinking of doing if SUN acquired TARO...which is not going to happen unless they offer fair value)
2. What do you think of $550m cash hoard. Those could be used to in license lot of products, R&D investments. Plus, they already have couple of NDA, 17 ANDA's. All the talk about pipeline is B.S talk to downplay the value of TARO so it can be purchased from us for cheap. Not going to happen.
Frankly if TARO is put on the block EV/EBITDA of >15 , plus a premium of 10-20% would give it around $180-$200 per share. http://bit.ly/PymyGa
James Altucher: Why The Stock Market Is A Sucker's Game Right Now (And What Stocks I Own) [View article]
I dont think that is the main issue. Other israel companies with headquarters in tel aviv trade much higher. This one is in Haifa. Pls read this and tell me your thoughts-> http://bit.ly/18j6GKV
On the point of your number of $150 per share for full acquisition of TARO IMO is very conservative. Pls remember TARO will have ~$550m (post-Q1) in cash and little debt....which will aid the acquirer. Another point why $150 per share is low.
Crimson - yes. The market price is EV/EBIDTA multiple b/w 15-20. Not what SUN has been throwing. Plus see strides generic pharma acquisition. In this nice generic pharma space, multiples are near 20. You are right , either SUN pays it on its own or litigation will make they pay it.
Mitchell, well researched article. Your number of $150 per share for full acquisition of TARO IMO is very conservative. 1) For an acquirer like Perrigo, Mylan there is considerable Synergy savings. 2) Plus, barring any FTC issues on acquisition, there is significant future pricing opportunities (due to 1 lesser competitor). Also, Perrigo already trades at 16 times EV/EBITDA.....Considering 1) and 2) even at 16 times multiple, perrigo's acquisition of TARO at 16 times will still be hugely accretive to its shareholders.
In terms of options you missed the following: 1. I am hoping an activist minority shareholder and builds/improves corp governance at taro to the benefit of all shareholders. a. Hardly US health funds know taro because they dont go to any investor conferences. b. With this kind of cash, It is VERY HARD to believe this company cannot make ONE product or company acquisition(in last 3 years) that is synergistic and accretive to taro shareholders and increase its market dominance in the dermatology industry. This IMO is a HUGE lost opportunity for all taro shareholders. Mylan and Perrigo are acquiring left and right. Here we have $500 million cash nicely tucked away. We all suspect (my speculation) why cash is idle: so sun can finance acquisition of taro minority interest.
My fond hope is a 5%(~2.5m shares) 13D filer comes one day and does 1)a,b for benefit of all shareholders.
I believe we need 1 minority shareholder with experience in strategy and M&A , who can help this board find better ways to use cash than the 0.5% interest we get today. Imagine if $500m is put to use and returns another $75m every year. that itself $1.7 EPS and an additional value of $25.5 per share at 15 times earnings.
The moderate increase in volume is a positive thing in that direction. I also think weak hands are selling to the strong believers in TARO: value investors. I think this also bodes well in protection of minority.
Trius: Clinical Trials Show Important Differentiation Of Tedizolid From Zyvox [View article]
Thank you for clarifying. For me, your research by far stands out among SA publishers. You dig deep and I like how you list risk factors. Do you own a significant portfolio of biotech stocks? Do you hold big % of TSRX in your portfolio. Thanks.
Actavis - A Potential Deal With Warner Chilcott Would Further Spur Interest In Actavis Itself [View article]
http://bit.ly/18j6GKV
Perrigo - A Healthy Bet For Your Portfolio [View article]
My Thoughts On Taro [View article]
My Thoughts On Taro [View article]
My Thoughts On Taro [View article]
you said: Taro at a valuation of 18x ebidta is shooting for the stars.
1. Actavis(generic pharma) snubbed an offer that was 20 times EBITDA from Valeant (specialty pharma). Valeant is the most voracious acquisitive company I have known. They have made some 30 acquisitions in the last 5 years. I am 99% sure that if TARO is put on the block, valeant will at least offer 15 times EBITDA. Remember they also get synergy savings as well as all the new markets that Valeant could sell TARO's products...Japan, Brazil, Eastern Europe, China, India. My understanding is TARO is not yet making a big push in these markets .(maybe they were thinking of doing if SUN acquired TARO...which is not going to happen unless they offer fair value)
2. What do you think of $550m cash hoard. Those could be used to in license lot of products, R&D investments. Plus, they already have couple of NDA, 17 ANDA's. All the talk about pipeline is B.S talk to downplay the value of TARO so it can be purchased from us for cheap. Not going to happen.
Frankly if TARO is put on the block EV/EBITDA of >15 , plus a premium of 10-20% would give it around $180-$200 per share. http://bit.ly/PymyGa
Why A Stock Market Bubble Is Forming Right Now [View article]
James Altucher: Why The Stock Market Is A Sucker's Game Right Now (And What Stocks I Own) [View article]
Pls read this and tell me your thoughts-> http://bit.ly/18j6GKV
James Altucher: Why The Stock Market Is A Sucker's Game Right Now (And What Stocks I Own) [View article]
James Altucher: Why The Stock Market Is A Sucker's Game Right Now (And What Stocks I Own) [View article]
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My Thoughts On Taro [View article]
Feel free to share your thoughts.
My Thoughts On Taro [View article]
My Thoughts On Taro [View article]
Mitchell, well researched article.
Your number of $150 per share for full acquisition of TARO IMO is very conservative. 1) For an acquirer like Perrigo, Mylan there is considerable Synergy savings. 2) Plus, barring any FTC issues on acquisition, there is significant future pricing opportunities (due to 1 lesser competitor). Also, Perrigo already trades at 16 times EV/EBITDA.....Considering 1) and 2) even at 16 times multiple, perrigo's acquisition of TARO at 16 times will still be hugely accretive to its shareholders.
In terms of options you missed the following:
1. I am hoping an activist minority shareholder and builds/improves corp governance at taro to the benefit of all shareholders.
a. Hardly US health funds know taro because they dont go to any investor conferences.
b. With this kind of cash, It is VERY HARD to believe this company cannot make ONE product or company acquisition(in last 3 years) that is synergistic and accretive to taro shareholders and increase its market dominance in the dermatology industry. This IMO is a HUGE lost opportunity for all taro shareholders. Mylan and Perrigo are acquiring left and right. Here we have $500 million cash nicely tucked away. We all suspect (my speculation) why cash is idle: so sun can finance acquisition of taro minority interest.
My fond hope is a 5%(~2.5m shares) 13D filer comes one day and does 1)a,b for benefit of all shareholders.
I believe we need 1 minority shareholder with experience in strategy and M&A , who can help this board find better ways to use cash than the 0.5% interest we get today. Imagine if $500m is put to use and returns another $75m every year. that itself $1.7 EPS and an additional value of $25.5 per share at 15 times earnings.
The moderate increase in volume is a positive thing in that direction. I also think weak hands are selling to the strong believers in TARO: value investors. I think this also bodes well in protection of minority.
Trius: Clinical Trials Show Important Differentiation Of Tedizolid From Zyvox [View article]