DocSnowball Posted January 3, 2020 Share Posted January 3, 2020 Paratek pharmaceuticals (PRTK) FDA approved oral and iv antibiotic for two indications. Holds ~220M in cash and short term, won a recent DoD contract worth another 150M plus in NPV. Has 264M plus in long term debt liability, and currently priced for negative to no NPV for the approved antibiotic due to industry realities (antibiotics don't sell enough to make money spent on post-approval research and marketing expenses). Two companies in the space have already gone bankrupt, with a few more at death's door. Having a large capital cushion means Paretek will survive into and beyond 2021. The catalyst in this industry is the DISARM act which proposes to delink reimbursement hospitals receive for using antibiotics from the lump sum they get from CMS/ Insurances per hospital admission - currently the act is in limbo and may see action either before the election or more likely after the election. CMS has slowly been uncoupling antibiotic payments on its own as well - in the past it was bundled into hospital payments, now CMS covers 75% of the price. While this may not be enough to tick up sales of new antibiotics, it will change CBO estimates of $ impact of DISARM and may be enough for politicians to muster courage to save this much needed industry. Former FDA commissioner Scott Gottlieb stated this space is one of his areas of interest to work in after leaving the FDA. High risk investment that can triple if DISARM act passes or slowly go down to near zero if DISARM act does not pass, but the DoD contract provides some margin of safety for the current market cap of 132M. Link to comment Share on other sites More sharing options...
LC Posted January 3, 2020 Share Posted January 3, 2020 A stock that I have not found yet, but will continue to look for: A company that is well-positioned to benefit from the move to renewables in electrical energy production, but not so obvious that it is already over/fully priced. I think this means that it is not a pure solar/wind production company, not electrical cars, not one of the big battery-producers. But someone who is selling the proverbial shovel in the gold rush (I might be stretching that expression). "Smart-grid", storage, something in that area. SEDG, but at a lower price ;) ABB, in lack of more specialized companies... BorgWarner perhaps? Doesn't seem too expensive, but tied pretty closely to the auto market. Link to comment Share on other sites More sharing options...
DTEJD1997 Posted January 3, 2020 Share Posted January 3, 2020 Hey all: One of my very favorite stocks for 2020 is Caledonia Mining (CMCL). I know that it is not liked or thought well of. HOWEVER, they increased their quarterly dividend today by about 9%. They also have hinted at much IMPROVED financial results. The main catalyst will come towards the end of the year with the commissioning of the new "central shaft". This will greatly increase production, cash flow, and earnings. It will move them towards a production goal of 80k oz. per year. Gold price is up bigly today ($1,547) and the tensions with Iran. Will gold go higher? I don't think it is impossible. We will see. Link to comment Share on other sites More sharing options...
SafetyinNumbers Posted January 3, 2020 Share Posted January 3, 2020 My top pick for a non-cyclical name (I own some STNG and some NNA too) for 2020 is Atento (ATTO.N). The share price is undervalued because of concerns on margins, leverage and the Bain ownership overhang and there should be positive updates in all areas over the year but starting in Q1. I wrote about ATTO here: https://seekingalpha.com/article/4314926-atento-deserves-your-attention Link to comment Share on other sites More sharing options...
eclecticvalue Posted January 3, 2020 Share Posted January 3, 2020 I have written about this before and I still think it will do well in 2020. It is Hill International- HIL. You can check out the thread here where I posted a write-up. https://www.cornerofberkshireandfairfax.ca/forum/investment-ideas/hil-hill-international/ Link to comment Share on other sites More sharing options...
BG2008 Posted January 3, 2020 Share Posted January 3, 2020 CLMT consist of refinery and specialty chemicals. Specialty chemicals are much more stable in terms of revenue, margins, and volumes shipped. Refinery earnings can be very volatile (slide 4 of their annual presentation http://calumetspecialty.investorroom.com/Events). Looking through earnings reports they clearly break out margins on specialty but show nothing about fuels. The reason is the volatility of earnings/losses. CLMT is moving away from fuels by selling their refineries. The numbers you are referencing (I'm guessing here because I don't know what you used to get them and they different [albeit, slightly] from what I have) combine both segments. Sale of the Montana refinery shouldn't be too big of a hit on the earnings but should put a dent in debt thus improving the ROIC. Operating margins should go up as well. I'd also highlight cashflow component to see (what I perceive) a cheaply priced business with few potential catalysts. Cheers I don't think enough people are paying attention to this. You need to look at the segment info not the consolidated info. I should keep my mouth shut as I am looking to buy more if they announce sale of the Montana refinery. Link to comment Share on other sites More sharing options...
gjangal Posted January 4, 2020 Share Posted January 4, 2020 Some compounder bro type picks for the year FTNT - Tailwinds in the security industry, industry itself is growing at a decent clip. Gaining market share from other players. Spend seems to be uncapped for now - Very large customer base, around 300k customers and growing - Potential for more add on products - High margin service/support contracts - High founder ownership ~12% MTCH - Large runway outside of the US - 19% unit growth in users, monetization can come later as long as engagement is there - Some amount of network effects Link to comment Share on other sites More sharing options...
shhughes1116 Posted January 4, 2020 Share Posted January 4, 2020 CLMT consist of refinery and specialty chemicals. Specialty chemicals are much more stable in terms of revenue, margins, and volumes shipped. Refinery earnings can be very volatile (slide 4 of their annual presentation http://calumetspecialty.investorroom.com/Events). Looking through earnings reports they clearly break out margins on specialty but show nothing about fuels. The reason is the volatility of earnings/losses. CLMT is moving away from fuels by selling their refineries. The numbers you are referencing (I'm guessing here because I don't know what you used to get them and they different [albeit, slightly] from what I have) combine both segments. Sale of the Montana refinery shouldn't be too big of a hit on the earnings but should put a dent in debt thus improving the ROIC. Operating margins should go up as well. I'd also highlight cashflow component to see (what I perceive) a cheaply priced business with few potential catalysts. Cheers I don't think enough people are paying attention to this. You need to look at the segment info not the consolidated info. I should keep my mouth shut as I am looking to buy more if they announce sale of the Montana refinery. I spent a lot of time following this company starting back in 2008. They have a number of high margin specialty product lines, and they operate in a space where there is plenty of potential for small bolt-acquisitions. However, their challenge, and associated destruction of shareholder value, was their foray into drilling fluids right before oil tanked, and the acquisition of refining capacity beyond what they needed to produce their specialty products. The refining capacity, in particular, was a killer for them. Low-margin, capital intensive business meant that they could never really “turn the corner” and start generating significant cash flow. I like their new CEO (started back in 2016), and he seems to be taking them back to their roots - specialty lubricants. Link to comment Share on other sites More sharing options...
Saluki Posted January 5, 2020 Share Posted January 5, 2020 My top pick for a non-cyclical name (I own some STNG and some NNA too) I own some STNG too, it's a decent position along with a small basket of of other shipping stocks based on the IMO2020 thesis. My pick is my 3rd biggest position: SSW. I started buy in the 6s and gained more confidence in it after meeting sokol at the fairfax meeting a couple of years ago. I think every company with newer ships will win big this year because of the new fuel requirements. The price discrepancy should create some major price spikes the way they did when double hull ships replaced single hull ships, or the way steam ships were bankrupted by internal combustion ships in the 1980s (only LNG ships, i believe, still use steam engines...long story). SSW should benefit from that tailwind, the new capital structure with the revolving credit, the investment from fairfax, and opportunistic investments in energy that SSW is looking at. Link to comment Share on other sites More sharing options...
perulv Posted January 5, 2020 Share Posted January 5, 2020 A stock that I have not found yet, but will continue to look for: A company that is well-positioned to benefit from the move to renewables in electrical energy production, but not so obvious that it is already over/fully priced. I think this means that it is not a pure solar/wind production company, not electrical cars, not one of the big battery-producers. But someone who is selling the proverbial shovel in the gold rush (I might be stretching that expression). "Smart-grid", storage, something in that area. SEDG, but at a lower price ;) ABB, in lack of more specialized companies... BorgWarner perhaps? Doesn't seem too expensive, but tied pretty closely to the auto market. Thanks, I will check it out. I agree that it looks reasonably priced, and the debt-level doesn't look frightening either. Link to comment Share on other sites More sharing options...
LC Posted January 6, 2020 Share Posted January 6, 2020 Solvay also makes some materials used for lithium batteries, but not sure how meaningful. Good luck! Link to comment Share on other sites More sharing options...
Gregmal Posted December 31, 2020 Share Posted December 31, 2020 Oh what a year! Link to comment Share on other sites More sharing options...
LC Posted December 31, 2020 Share Posted December 31, 2020 The year end post mortems should be thought provoking for sure. Link to comment Share on other sites More sharing options...
rkbabang Posted January 1, 2021 Share Posted January 1, 2021 Oh what a year! The only stock I own out of all of them listed above is AYR Strategies and it sure had a great year. I don't think it was this topic that I first heard it, because I owned it already by the end of 2019, but I'm pretty sure it was one of your posts where I first heard of it. Thanks. Link to comment Share on other sites More sharing options...
Guest cherzeca Posted January 1, 2021 Share Posted January 1, 2021 SPY up over 16% for 2020, up over 83% for last 5 years. diversified slice of American capitalist greatness. SPY is Lindy, to use a Talebism. Link to comment Share on other sites More sharing options...
Viking Posted January 1, 2021 Share Posted January 1, 2021 From my perspective, the great lesson from 2020 is to follow the facts.... and when the facts change update your portfolio accordingly. Fairfax was my top pick at the start of 2020. Once the pandemic hit and it was clear a severe recession was coming, i sold 100% of my position. Recently, i am once again back in Faifax in a big way... but at prices +30% lower than where i sold in late Feb. Capital preservation is a second very important lesson. Very hard to recover from very large losses. Link to comment Share on other sites More sharing options...
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