Alaris Royalty Corp ALARF

Q3 results after close on Monday

[Aggirl7]

We've all seen it tons of times before - a stock (no matter how weak or strong the company) gets pushed down too far ahead of an expected weak quarter. Even if the weak quarter is well advertised and fully reflected in analyst's estimates, many investors don't want to buy a stock until the quarter is over. Heck, check out the current charts on AFN, ITP, ENF and ENB for examples!

In Alaris's case, the market is worried about the writedown of SM b/c it is not known how large it will be. Yes, we can all add up the investment book value, unsecured notes o/s, and previously unpaid distributions (~$65M) but this will not all be w/o. We know Alaris will receive funds from SM's cash arbitration award.

At the end of the day, who cares? The SM book value is ~5% of Alaris's total invested capital and writing it off will be a NON-CASH impairment that will be stripped out of Adjusted EPS b/c it's extraordinary and non-recurring in nature. Cash is king and all that matters and stripping SM out of Alaris' cash flow model impacts the payout ratio by a measly 2%. If you read the analyst research, they have already stripped future SM cash payments out of their models!

Hopefully after the results on Mon and ccall on Tues, investors can move on and focus more on the postive news Alaris has put out recently like SBI, the largest investment in its history, and increasing its investment in 2 star companies!