CPH ValueCipher is unique.
Did deeper research, pursant to the shocking growth in sales in Q2 + first time ever seeing product sales surpass licensing. This was/is game changing, and the market is reflecting that. I bought in at around 1.00 a while back, calling it the cheapest stock I could find in both Canada and the USA, and now after the run up to around 2.30, it is even cheaper, because of the developments I just mentioned.
1- Their current business alone is likely worth 9.00 per share, using 0.55 EPS annual run rate, clean balance sheet, and the probability that current sales and earnings are likely to creep upwards without any additional spend or products. This is in stark contract to the prior expectation of gradually declining sales and profitability pending new products. This is because of their strong Canadian product revenues and steadily increasing market share and sales of Epuris.
2- The valuation mentioned EXCLUDES what might come of MOB15 and other developments. MOB15 is a very exciting product, some time down the road, as it addresses nail fungus through an ointment applied to the nail vs the current treatment of pills that can screw up your liver. If one thinks about that a moment, there must be a massive amount of people that do not take the current treatment option because the thought of swallowing a pill that might mess up your liver doesn't sound too appealing, to say the least. Based on that, we can extrapolate that the potential market for MOB15 is much, much larger than the already large market size for the existing product... the value of MOB15 alone could exceed the current potential value of Cipher (9.00 + MOB 15 = > 20.00)
3- Other products in the pipeline. I have not delved into them deeply and am unsure of their value.
4- Tatoo. This is a wildcard. If this product does work, and depending how well it works, it could be worth billions, though the likelyhood seems remote to me. Perhaps it will work to some extent and could be used to complement/assist current tatoo removal methods. I abscribed no value at this time.
5- Of lesser value is they have talked in May of doing a strategic transaction of some sort. Either an acquisition or merger or something. The CEO stated in the video interview that they have something in the works and hope to make an announcedment in 6-9 months, which timeline starts to hit next month. This seems quite probable since they have made no significant announcements of capital spend in nature, so presumably they have something happening that they are working on.
Point 5 might be a bit disappointing because if it comes to pass we may never see the whole story of CIpher play out from points 1-4. Point 5 would possibly pop the share price somehow, but not to something crazy like > 10.00, which looks likely to happen to me from 1-4 above.
Cipher has risen rapidly but cannot go all the way up immediately because the nature of markets is that a lot of people (myself included) are reluctant to buy something once it has risen a lot, especially value investors.
I bought a tiny bit more CPH at 2.65 and 2.40 (if memory serves) in small TFSA account (already own mountains myself) , breaking my own rule on this one, based on new research and opinion of the stock.
Good luck to all, sure is going to be interesting.