I have a new article at Seeking Alpha on generic drug manufacturer Mylan (MYL):
Mylan: Deeply Undervalued On Unwarranted Approval Concerns
I began following Mylan in earnest in Q2 of 2013. I first bought some Mylan on March 20, 2014. I expect Mylan to double by the end of 2015 (expect in the sense of the center of the probability curve. Results can vary).
This is a (thankfully) slow week, but on Monday Adept Technology (ADEP) reported disappointing results. My summary is Adept Technology Q2 2014 analyst conference notes. I would like to see this robotics company grow and reward investors, but I think it is overpriced at the moment. I first bought in November of 2012 for $3.95 when it was in an even worse situation than it is now. I bought it for as low as $2.94, but when it started to grow sales again some brokerages started hyping it and I sold for as high as $17.10, which was not even as high as it went before it plunged back down to reality, which today was $8.75 per share.
At $8.75 per share market cap is $114.6 million. But annualized revenue is only in the vicinity of $60 million, and ADEP remains in the red, though close to break even. If revenues double and profits ramp the $8.75 would be justified. Adept has a good, diverse robot product line, including robots for warehouse work, so it could happen. I'll continue to report on it, but to buy back in I would need to see a lower stock price or a quarter with over $18 million in revenue with some sort of guidance to a sequentially higher quarter.
Wednesday, August 27, 2014
Friday, August 15, 2014
Inovio, Dendreon, and Mylan
I made two trades this week. I sold Dendreon (DNDN) and bought Mylan (MYL).
Before explaining the trades, I'd like to direct you to my newest Seeking Alpha article, just published:
Will Inovio's Deal With Roche Lead To A Cancer Blockbuster?
The article includes some data from Dendreon, as the target disease is now castrate-resistant prostate cancer. Since Roche is paying for the trials and also paying Inovio milestone payments, the risk is not very high for Inovio (INO), though the payoff will also be less if the therapy ever reaches commercialization, just a royalty. I own Inovio stock.
Dendreon? What can I say? I first bought Dendreon stock in 2005. I made a good return when it ran up to bubble levels, and sold most but not all of it at a great profit in 2010. I started accumulating it again in 2011. I sold all my stock for a paltry $1.40 a share on Tuesday. Wish I had sold on Monday. So what happened?
Rather than following the normal course of issuing a press release giving the date Q2 results would be reported, along with the time of the analyst conference, Dendreon simply issued a 10-Q to the SEC late on Monday. They did not even issue a press release saying they issued a 10-Q. So naturally everyone went and looked at the 10-Q as soon as they found out. With a suspicious eye.
In many ways Q2 2014 was Dendreon's best quarter ever. But even with an insurance refund, improved Provenge sales, and further cost reductions, they lost money in the quarter.
Dendreon owes about $600 million due in 2016. They warned that saving the company likely means the note holders will get the company, leaving the stockholders out in the cold. They apparently have lost faith that even with the addition of European sales in 2015 that the company can generate enough cash to convince someone to refinance the loan.
Well, it happens sometimes. That is why corporate bonds are safer than stock. But the bondholders may find that they have a black hole to manage, not a profit stream. On the other hand, a merger, or better than expected cash flow between now and 2016, could save the stockholders. I sold because I had better use for even the pittance I got at $1.40 per share.
So what did I do with the cash? I thought about sitting on it, and all the companies that I find attractive, both in my portfolio and out. I bought more Mylan (MYL), a generic drug maker. My best guess is Mylan's stock price will double by the end of 2015, but as Dendreon shows, I could be wrong.
Meanwhile, I cheer myself up with some stocks I remain right about: Gilead, Celgene, Amgen, Biogen, and Applied Materials.
More than ever:
Keep Diversified!
Before explaining the trades, I'd like to direct you to my newest Seeking Alpha article, just published:
Will Inovio's Deal With Roche Lead To A Cancer Blockbuster?
The article includes some data from Dendreon, as the target disease is now castrate-resistant prostate cancer. Since Roche is paying for the trials and also paying Inovio milestone payments, the risk is not very high for Inovio (INO), though the payoff will also be less if the therapy ever reaches commercialization, just a royalty. I own Inovio stock.
Dendreon? What can I say? I first bought Dendreon stock in 2005. I made a good return when it ran up to bubble levels, and sold most but not all of it at a great profit in 2010. I started accumulating it again in 2011. I sold all my stock for a paltry $1.40 a share on Tuesday. Wish I had sold on Monday. So what happened?
Rather than following the normal course of issuing a press release giving the date Q2 results would be reported, along with the time of the analyst conference, Dendreon simply issued a 10-Q to the SEC late on Monday. They did not even issue a press release saying they issued a 10-Q. So naturally everyone went and looked at the 10-Q as soon as they found out. With a suspicious eye.
In many ways Q2 2014 was Dendreon's best quarter ever. But even with an insurance refund, improved Provenge sales, and further cost reductions, they lost money in the quarter.
Dendreon owes about $600 million due in 2016. They warned that saving the company likely means the note holders will get the company, leaving the stockholders out in the cold. They apparently have lost faith that even with the addition of European sales in 2015 that the company can generate enough cash to convince someone to refinance the loan.
Well, it happens sometimes. That is why corporate bonds are safer than stock. But the bondholders may find that they have a black hole to manage, not a profit stream. On the other hand, a merger, or better than expected cash flow between now and 2016, could save the stockholders. I sold because I had better use for even the pittance I got at $1.40 per share.
So what did I do with the cash? I thought about sitting on it, and all the companies that I find attractive, both in my portfolio and out. I bought more Mylan (MYL), a generic drug maker. My best guess is Mylan's stock price will double by the end of 2015, but as Dendreon shows, I could be wrong.
Meanwhile, I cheer myself up with some stocks I remain right about: Gilead, Celgene, Amgen, Biogen, and Applied Materials.
More than ever:
Keep Diversified!
Friday, August 8, 2014
Dot Hill, Nvidia analyst conferences
"For every sad fly, there is a happy spider"
Two interesting things happened this week near me.
Dot Hill (HILL) barely met prior guidance for Q2, and investors were hoping a slew of new customers for Dot Hill's advanced storage systems would bring in results well above guidance. The stock took a major hit following the Thursday morning Dot Hill results release and analyst conference (my notes).
The main issue in the quarter was a particular customer, typically Dot Hill's second largest, bought fairly little in the quarter. This customer services large datacenter installations, and revenue variance each quarter is significant. Dot Hill believes the customers orders will resume.
In addition, July bookings have been strong, and 4 customers are likely to release major new Dot Hill based storage systems before the end of the year. Q2 was back-end loaded, so a fair amount of product went out at the end of the quarter that will book revenue in Q3.
So what did I do? I bought more HILL yesterday, basically buying back the shares I sold in March for $5.88 per share for just $3.51. Most of my shares I bought long ago for between $1 and $2 per share.
Of course Dot Hill management could be wrong, revenue and profits might not ramp in Q3 and Q4 and on into 2015. But I think it is likely they will, and Dot Hill will be far more valuable by mid 2015 than it is today. However, keep in mind that Dot Hill has disappointed in the past. Being a small-cap data storage provider is a difficult business.
The Nvidia Q2 conference seemed like it would provide no surprises until, near the end, an analyst asked about the bitcoin computing phenomena that had raised rival AMD's results in Q4 and Q1, but then hurt them when demand dropped off in Q2.
CEO Jen-Hsun Huang said why Nvidia GPU's were typically not used for bitcoin mining, or cryptocurrency in general. AMD's GPUs provide more performance per dollar. Mr. Huang argued extensively earlier in the conference (and in prior conferences) that because of its installed base and superior software, Nvidia GeForce GPU's are gamers' favorites. Maybe so, but it appears to be a well known fact in the computational community that if you want a lot of computation for your buck you want to go with AMD. The reality is that certain workloads do better with Nvidia's architecture, and certain workloads do better with AMD. I see this all the time, even within games, with some games getting better benchmarks with AMD, others doing better with Nvidia, assuming the same pricing range.
Two interesting things happened this week near me.
Dot Hill (HILL) barely met prior guidance for Q2, and investors were hoping a slew of new customers for Dot Hill's advanced storage systems would bring in results well above guidance. The stock took a major hit following the Thursday morning Dot Hill results release and analyst conference (my notes).
The main issue in the quarter was a particular customer, typically Dot Hill's second largest, bought fairly little in the quarter. This customer services large datacenter installations, and revenue variance each quarter is significant. Dot Hill believes the customers orders will resume.
In addition, July bookings have been strong, and 4 customers are likely to release major new Dot Hill based storage systems before the end of the year. Q2 was back-end loaded, so a fair amount of product went out at the end of the quarter that will book revenue in Q3.
So what did I do? I bought more HILL yesterday, basically buying back the shares I sold in March for $5.88 per share for just $3.51. Most of my shares I bought long ago for between $1 and $2 per share.
Of course Dot Hill management could be wrong, revenue and profits might not ramp in Q3 and Q4 and on into 2015. But I think it is likely they will, and Dot Hill will be far more valuable by mid 2015 than it is today. However, keep in mind that Dot Hill has disappointed in the past. Being a small-cap data storage provider is a difficult business.
The Nvidia Q2 conference seemed like it would provide no surprises until, near the end, an analyst asked about the bitcoin computing phenomena that had raised rival AMD's results in Q4 and Q1, but then hurt them when demand dropped off in Q2.
CEO Jen-Hsun Huang said why Nvidia GPU's were typically not used for bitcoin mining, or cryptocurrency in general. AMD's GPUs provide more performance per dollar. Mr. Huang argued extensively earlier in the conference (and in prior conferences) that because of its installed base and superior software, Nvidia GeForce GPU's are gamers' favorites. Maybe so, but it appears to be a well known fact in the computational community that if you want a lot of computation for your buck you want to go with AMD. The reality is that certain workloads do better with Nvidia's architecture, and certain workloads do better with AMD. I see this all the time, even within games, with some games getting better benchmarks with AMD, others doing better with Nvidia, assuming the same pricing range.
Thursday, August 7, 2014
Vertex, Alexion, Gilead, Dot Hill and Mylan
And another story published at Seeking Alpha:
Vertex Price and Prospects Compared to Alexion
In addition to Vertex Pharmaceuticals (VRTX) and Alexion (ALXN), I discuss the controversy over Gilead's (GILD) pricing of its Hepatitis C cures. Vertex and Alexion are far more sensitive to the pricing issue than Gilead. However, Gilead already is overweight in my portfolio. I continue to consider Alexion and Vertex among my top choices if I add another stock to my list.
Mylan (MYL) and Dot Hill (HILL) both reported Q2 results and held analyst conferences this morning. Both disappointed the market. I remain long on both. Dot Hill in particular looks ready to ramp revenue nicely in the second half, but fell prey to traders who time horizon ranges from a microsecond to a few days.
My notes on today's conferences:
Dot Hill Analyst Conference & Results
Mylan Analyst Conference & Results
Vertex Price and Prospects Compared to Alexion
In addition to Vertex Pharmaceuticals (VRTX) and Alexion (ALXN), I discuss the controversy over Gilead's (GILD) pricing of its Hepatitis C cures. Vertex and Alexion are far more sensitive to the pricing issue than Gilead. However, Gilead already is overweight in my portfolio. I continue to consider Alexion and Vertex among my top choices if I add another stock to my list.
Mylan (MYL) and Dot Hill (HILL) both reported Q2 results and held analyst conferences this morning. Both disappointed the market. I remain long on both. Dot Hill in particular looks ready to ramp revenue nicely in the second half, but fell prey to traders who time horizon ranges from a microsecond to a few days.
My notes on today's conferences:
Dot Hill Analyst Conference & Results
Mylan Analyst Conference & Results
Tuesday, August 5, 2014
Microchip (MCHP) sales ramp explained; Regeneron quick look
I have a new article at Seeking Alpha:
How Microchip Ramped Earnings With 8-Bit Devices
Another reason Microchip (MCHP) may be undervalued is the strength of its recent acquisitions. Unlike some companies, Microchip seems to be able to pay reasonable prices to acquire smaller semiconductor companies, and then both ramps their sales and increases margins. It also may incorporate technology from the acquisitions into SoC devices (System on Chip).
I have owned Microchip continuously since 2007. It pays a nice dividend and has increased nicely in price over the years.
This morning I listened to the Regeneron conference call. It looks like there is going to be a big profit ramp in the coming months from Eyelea, followed by the likely ramping of a new blockbuster for cholesterol control starting perhaps in the second half of 2015. There is more in the pipeline too. On the other hand the P/E ratio is high, so some pipeline success is figured in. I hope to write a more detailed report about Regeneron some day soon. REGN. I first bought REGN in June of this year. You can read my Regeneron Q2 2014 notes by following the link.
How Microchip Ramped Earnings With 8-Bit Devices
Another reason Microchip (MCHP) may be undervalued is the strength of its recent acquisitions. Unlike some companies, Microchip seems to be able to pay reasonable prices to acquire smaller semiconductor companies, and then both ramps their sales and increases margins. It also may incorporate technology from the acquisitions into SoC devices (System on Chip).
I have owned Microchip continuously since 2007. It pays a nice dividend and has increased nicely in price over the years.
This morning I listened to the Regeneron conference call. It looks like there is going to be a big profit ramp in the coming months from Eyelea, followed by the likely ramping of a new blockbuster for cholesterol control starting perhaps in the second half of 2015. There is more in the pipeline too. On the other hand the P/E ratio is high, so some pipeline success is figured in. I hope to write a more detailed report about Regeneron some day soon. REGN. I first bought REGN in June of this year. You can read my Regeneron Q2 2014 notes by following the link.
Monday, August 4, 2014
Regeneron, Dot Hill, Mylan and Nvidia to report this week
This is probably the last intense week of earnings season for me. I still have a bit of cash in my portfolio, and like to try to wait until the end of the season before deploying cash, or not, or even raising more by selling some stock.
First up Regeneron (REGN) Tuesday morning, the conference begins at 5:30 AM my (Pacific) time, so I might wait to listen to the recording. In any case my notes will eventually appear at Regeneron Q2 Analyst Conference Notes. I started a very small position in REGN in June, so this will be my first conference as a stockholder. I'll be looking to see how revenue is ramping, but most of the value is still in the pipeline, so any news on that will be of great interest.
I'll be listening to supercomputer manufacturer SGI on Wednesday, but I don't expect much from them. But you never know. If the stock is cheap enough and they show signs of improving, I would consider buying back in. My notes will be at SGI Q2 analyst conference.
Thursday is the busy day. Starting with Mylan (MYL) at 7:00 AM PT, notes at Mylan Q2 2014 analyst conference. Mylan is a generic drug maker. I'll be looking for a report on biosimilars, but mainly the question is how did overall revenue come in, and what were costs and resulting earnings. I think 5 years down the road I will be happy to have started a position this year, but I don't see where a short term pop could come from.
Dot Hill (HILL) is at 8:00 AM PT. This little-known company makes data storage equipment that is rebranded by an increasing number of storage companies. It is my largest small cap holding, so I am keenly interested. At this point it is mainly a question of how much their end customers ramp sales, which is hard to predict. The stock price did extremely well in 2013, and I think will be up again significantly by early 2015, but predicting quarter to quarter sales and profits and stock price is difficult. Dot HIll Q2 2014 analyst conference.
Nvidia is the only company in this lot that has a recognizable brand name. I don't own any NVDA but I have in the past. Nvidia has great graphics engineers and a plan to capitalize on graphics computing both on mobile devices and on the cloud computers that service them. I own stock in rivals AMD and Marvell (MRVL). I would certainly considering owning NVDA at some price point, and will be watching for its cloud computing progress in this normally seasonally slow fiscal quarter, which includes July. Nvidia Q2 2014 analyst conference.
Of course many more companies report this weak, and I enjoy getting other financial writer's reports, and hearing the opinions of others in the investment community. While I will read articles from any source, I generally find that Seeking Alpha, which I write for, is consistently more helpful to me than other sites. I also read the SEC documents of a company before investing; only fools don't.
First up Regeneron (REGN) Tuesday morning, the conference begins at 5:30 AM my (Pacific) time, so I might wait to listen to the recording. In any case my notes will eventually appear at Regeneron Q2 Analyst Conference Notes. I started a very small position in REGN in June, so this will be my first conference as a stockholder. I'll be looking to see how revenue is ramping, but most of the value is still in the pipeline, so any news on that will be of great interest.
I'll be listening to supercomputer manufacturer SGI on Wednesday, but I don't expect much from them. But you never know. If the stock is cheap enough and they show signs of improving, I would consider buying back in. My notes will be at SGI Q2 analyst conference.
Thursday is the busy day. Starting with Mylan (MYL) at 7:00 AM PT, notes at Mylan Q2 2014 analyst conference. Mylan is a generic drug maker. I'll be looking for a report on biosimilars, but mainly the question is how did overall revenue come in, and what were costs and resulting earnings. I think 5 years down the road I will be happy to have started a position this year, but I don't see where a short term pop could come from.
Dot Hill (HILL) is at 8:00 AM PT. This little-known company makes data storage equipment that is rebranded by an increasing number of storage companies. It is my largest small cap holding, so I am keenly interested. At this point it is mainly a question of how much their end customers ramp sales, which is hard to predict. The stock price did extremely well in 2013, and I think will be up again significantly by early 2015, but predicting quarter to quarter sales and profits and stock price is difficult. Dot HIll Q2 2014 analyst conference.
Nvidia is the only company in this lot that has a recognizable brand name. I don't own any NVDA but I have in the past. Nvidia has great graphics engineers and a plan to capitalize on graphics computing both on mobile devices and on the cloud computers that service them. I own stock in rivals AMD and Marvell (MRVL). I would certainly considering owning NVDA at some price point, and will be watching for its cloud computing progress in this normally seasonally slow fiscal quarter, which includes July. Nvidia Q2 2014 analyst conference.
Of course many more companies report this weak, and I enjoy getting other financial writer's reports, and hearing the opinions of others in the investment community. While I will read articles from any source, I generally find that Seeking Alpha, which I write for, is consistently more helpful to me than other sites. I also read the SEC documents of a company before investing; only fools don't.
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