Pros and Cons - based on current data after assets and debt share holder equity is 301,049 million
- at current price of $2.94 a share that is market cap of 152,340 million
- based on this you can derive a book value of $5.80 per share
So on first glance it seems this company is undervalued. However book value is only one part.
CXR earnings can dedicate future growth and sustainability of company.
If we take a look at Q3 2016 report, CXR suffered substantial revenue loss in US from competition.
We also have tighter UK rules which could mean a lockdown or decrase in future revenues for drugs sold in UK.
Majority of revenue is from UK/AMCo purchase but reporting is done in USD. If you look at currency exchange rate UK has not done well against USD in 2016.
These may be the continuing factors which will affect the Q4 2016 report.
Some speculative thoughts below:
A positive view could be there may be surprise revenue from some of the new products to be launched. Some critics however has said these are rebranded old drugs with unsubstantial revenue growth.
One could also say if there was truly any value in CXR, there would either be a potential buyout or at least insider buying. But neither seems to be happening at this current time.
Market sentiment at this momement also does not seem to be well for pharma with companies like VRX making negative headlines; such as the latest Bill Ackman selling all shares in VRX.
I think the last major run or so called "golden era" was when VRX and CXR share prices were in the hundreds and people were also into Cipher, Noblius, Patient Home Monitoring etc. Everyone got ahead of itself, debt was cheap, but valuations were outrageous, but no one cared becasue stock prices kept going up. And then of course the Martin Shkreli and Hiliary tweet incident changed the momentum.
I'm really curious to look at companies financials and hear from Allan Oberman on tomorrow's conference call. What does he have planned. Will there be guidance? Will there be investment into any late phase research? Or small but profitable acqusitions? Will there be restructing?