Knight Therapeutics Inc T.GUD

GUD trading at fair value?

[EbbFlow88]

I did some back of the napkin calculations and noticed that GUD is pretty fairly valued as of today and that seems to be 100% related to the BRL currency.

The cash and cash equivalents total approx. $3/share leaving $2.40/share today for GBT.

If you take todays exchange rate of CAD/BRL, it is 25% lower since the date of acquisition of GBT.

GBT acquired for $389M x 75% = $292M which is roughly $2.25 per share.


So, the market isn't necessarily punishing Goodman based off this move but he has certainly lost his Goodman premium.

Assuming there is another acquisition in the pipeline which can diversify the currency risk, that may reflate his premium. Then there is upside of the growth of this business which I believe he will execute on.

Seems to be pretty cheap here based off future growth potential unless BRL is going to get hammered more. For long term investors, this is a great entry point in my opinion.

[Benedict16th]

Thanks for the insight, in all brilliant black Knight’s strategist lost 100 million dollar  on the GBT deal and no profits nor new drugs so far. Anyone applauding the GUD team? 

[EbbFlow88]

I guess that depends on what you think the future is for the BRL.It is historically cheap now. Will that continue or revert to the mean? If you believe that GUD bought it cheap, well now its very cheap.  If you have a long-term view, then it is likely it will rebound, GBT will grow and GUD will make more acquisitions. Maybe I'm wrong but odds seem in our favor here.

[wagyusteak]

  you can't explain reasons to a knucklehead bro. We tried, it didn't work. Just talk stock price to him. He understands it. Up means good, down means bad. Lol

[MrMugsy]

I agree with you EbbFlow ... we're at a buyer's price. That's exactly what we're doing at these levels !!! If the BRL gets hammered some more, that just makes LATAM assets potentially more interesting to Goodman. IMO.