Author Topic: PDRX - PD-Rx Pharmaceuticals  (Read 19825 times)

no_free_lunch

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Re: PDRX - PD-Rx Pharmaceuticals
« Reply #60 on: January 12, 2018, 05:15:37 PM »
I think you guys might have actually moved the market on this.  It's up 10-15% over the past few days.  Was just getting to the point where I was ready to build a position.  It still seems reasonably priced but given where it was trading oh, back on tuesday it is hard to buy at these levels.  I think though that if I wasn't aware of past history I would still be a buyer right now.  Funny how that works.


no_free_lunch

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Re: PDRX - PD-Rx Pharmaceuticals
« Reply #61 on: January 13, 2018, 05:10:17 AM »
PDRX pays a 39% tax rate.  I am not sure of the tax reform impact but if it drops the rate by 13% (I heard that was the standard drop but correct me if I'm wrong) that would increase earnings by almost 20%.  The $.36 earnings last year would go up to $.44 without any growth assumptions.   That translates to a 15pe with all that cash thrown in for free.

The way I see it, as far as modeling it:

$.44 earnings * 12 multiplier (it's a specialized retailer, seems quite conservative) = $5.28

I think you can also split the cash out now that they are paying a dividend.  The multiple would go up if there is ever a special dividend.

$4.15 cash & equivalent * 0.6 holding company discount  = $2.45

Total conservative NAV = $7.73

Based on this, it still seams reasonably priced. 
« Last Edit: January 13, 2018, 05:13:59 AM by no_free_lunch »

KJP

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Re: PDRX - PD-Rx Pharmaceuticals
« Reply #62 on: January 13, 2018, 08:09:53 AM »

I think you can also split the cash out now that they are paying a dividend. 

The press release accompanying the 2017 dividend referred to it as a "one-time" dividend.  Has management now said that they intend to pay regular dividends?

writser

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Re: PDRX - PD-Rx Pharmaceuticals
« Reply #63 on: January 13, 2018, 09:15:07 AM »
Nope, they have not. However, it's a sign in the right direction and I wouldn't be surprised if they do it again this year.
When you are dead, you do not know you are dead. It's only painful and difficult for others. The same applies when you are stupid.

Foreign Tuffett

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Re: PDRX - PD-Rx Pharmaceuticals
« Reply #64 on: January 13, 2018, 10:37:13 AM »
I think you guys might have actually moved the market on this.  It's up 10-15% over the past few days.  Was just getting to the point where I was ready to build a position.  It still seems reasonably priced but given where it was trading oh, back on tuesday it is hard to buy at these levels.  I think though that if I wasn't aware of past history I would still be a buyer right now.  Funny how that works.

I also struggle with my thinking getting "anchored" to whatever the stock price is when I begin looking at an idea.

P/E isn't one of my preferred valuation metrics, but directionally I agree with you. At $6.75 per share, 2017's enterprise value / operating profit is ~3.36, which looks very cheap on a purely quantitative basis. I think it looks even cheaper when you start to think about this business qualitatively (consistently profitable, owner-operator management, has been around 30 years, etc.).

I think their income tax rate next year will no higher than of 27% (6% Oklahoma state corporate income tax rate + new 21% federal max rate). Note that I'm not a tax attorney and am only broadly familiar with the new tax bill.

Assuming operating performance doesn't significantly deteriorate, I think it's quite likely a dividend will be declared again this year, especially considering the newly lowered tax rate.

I hope this doesn't come off like I'm trying to pump this stock. I just think that if someone was able to put together a portfolio of solid companies like PDRX at prices similar to where it's currently trading, they would likely do extremely well. This is basically the idea behind "The Acquirer's Multiple" quantitative strategy. Note that PDRX would be the single cheapest company in The Acquirer's Multiple's Large Cap 1000 if it were included in that index (yes, I'm aware PDRX is a nano cap and not a large cap). If you exclude the two ADRs at the top of the list, PDRX is nearly three turns cheaper than the cheapest US-based large cap. 

https://acquirersmultiple.com/screener/large-cap/