RE:RE:RE:RE:2.5 Million Shares Cancelledlongrun86 wrote: I don't want this board to be a tool for confirmation bias; however, I find the arguments from the group on lack elaboration and to a certain degree credibility.
A few other thoughts to elaborate on.
1) Patience: The market has not had the patience around the development of the business platform. I can appreciate that people felt that the investment was dead money relative to other investment opportunities. If you bought into Knight without listening to Mr. Goodman's timeframe for ownership then that was a risk you opted to take. If you didn't listen to what Mr. Goodman said then you did not perform sufficient due diligence. Your holding period on Knight will continue to require patience; albeit, probably not as much patience as if you bought immediately after the Paladin spin-out.
2) LATAM & Covid: Things are improving in LATAM with Covid but the usual risks around government issues, civil unrest, inflation, etc. continue to be front and center. Latin America's GDP per capita has some catching up to do from a decade ago. You have to believe in Latin America or Knight won't work for you.
3) Drug Distribution: This is a business model that does not appear to be going away any time soon. I believe that the legal and regulatory frameworks as well as the relationships with health care providers support my view. This distribution model is different than other distribution models where the barriers to entry are falling based on consumer purchasing patterns.
4) Strategy: The ROW strategy continues to make sense based on the market attributes. I bought Knight because I was constructive on LATAM and what the company could do with a well executed business plan.
5) Valuation & Buybacks: The company trades at less than book value (0.78x). The return on equity is positive (albeit low); therefore, book value is growing. There is a path to improving the return on equity which will increase book value at a faster rate that the historically low rates. There appears to be ample cash and a high level of borrowing capacity to support future growth.
Best of luck,
LR
Goodman doesn't want debts. He said he doesn't want to trade a sleep night for a better retur Why would they change their plan and use borrowing capacity now ?