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Someones liking something !
notgreedy, I like your style! What would be your best tips at the moment?
U r right again, my first love, (or second maybe third, we�ll just say love) utilities fundamental part of any nations welth, is bashed. Not entirely without reason. Since privatisation of natural resources every bod has been siphoning values out of cos in firm of divi, remuneration, needles overpriced acquisitions of mates and relatives cos.... Destructive waist creative industries r raised to sky. JE. Ocado, and most others u mentioned r in a sector what I call racket , be it digital feudal ( fox, cwd, purp....) Pump and dump brigade woke up again. Keep going I would like to see mid �33 soon. As saga, I looked at some time ago, didn�t like financials + potential liabilities and never looked bac again. More mares on market than I could ride.
Shire (Nasdaq: SHPG), a biotechnology company focused on rare diseases, was approached about a potential takeover, according to a person ... This is a premium only article. To continue reading this article and more like it please sign-in or upgrade to StreetInsider.com Premium below (Free Trial) https://www.streetinsider.com/Mergers+and+Acquisitions/Shire+%28SHPG%29+Said+to+Receive+Takeover+Approach+-+Source/13887436.html
I'm sceptical about a bid. There has been rumour after rumour in the past and nothing comes of it. I don't believe a word of it.
Leaked bid
Streetinsider reports they have been approached for a takeover
Social network rare count initiative that they have announced today maybe? It�s about time we had some positivity with these shares!
In share price , is there breaking news ?
notgreedy look at utilities like Centrica and SSE trading at just 10x earnings. Water the same. National Grid another. WPP 10x earnings; ITV another. Then you have trash like Hutchison, BTG, Abcam, Just Eat, Boohoo, ASOS, SSPG & co trading on anything between 40-100x earnings. What do you make of Saga? A well established name knocked down from over 200p (IPO 215p in 2014) to just 110p now with EPS 14p and a P/E of under 8. Dividend c. 9p yielding 8% and cover 1.6x. Yes the market does not make sense.
U right there are worse cos. In time of miners, IT bushing it was referred as zombie cos. Even than some wore allowed to be eaten buy other zombies. Interesting suspension and jump in sp. has bod collectively resigned?
in auction we were
As stated before several times yes notgreedy the intangibles/goodwill figures are high here as a % of total assets but they are also high at other pharmas. For example GSK had net assets at year end of only �3.5Bn and that is not including �23Bn in intangibles and goodwill! Not many know that GSK has a book value of only 70p and is trading at almost 20x this figure. That is far, far worse than Shire which has an absolute book value of 2900p.
Growth by acquisition financed by debt not cash is identical to all cos with this business model, pharma retail engineering it... I like next for bods levelhesdnes. Buy back at caped tp, huge divi - return to shareholders, in step with customers habitats, investment in it financials. but massive receivables. TNAV v mcap % similar to shp�s. Should we slide back in recession many will default on payments. Than you look at TNAV hardly any, but hard and honest working bod is what is sustaining sp. difference to shop .just in case u ask I had short on it too, long as well in past. difference google, apple Microsoft and few others can afford grossly overpaying expansions-acquisitions cos they make huge real profits and will continue to do so eliminating competition one way or the other. This cos have more power than not jus countries but continents. Till radical changes ( regulations- revolutions) imposed on them to prevent total meltdown of our societies. This cos are like supernovas, metropolis sucking in recourses and creating waist. On a bright side Nasdaq points to 2% up
I would look at future cashflows and discount them back. Things like goodwill and intangibles are meaningless as they have no cash impact. They reflect accounting from past transactions. Write them all off - it would make no difference. Based on the the DCF valuation, yes I would buy this up to about mid 40s but only using current assumptions that are out in public domain. This is nothing like clln in character - if you genuinely think they are similar in financial character, you should stop investing for ever. The business model of clln & SHP are poles apart. Seriously? You let yourself down with that one.
I wish u right, but receivables and goodwill brought clln ( and many others) down. This r shps official numbers. How anyone decide to see them will affect mcap-sp. Total liabilities are always considered in to. Products have shelf life and buyers can and will default on payment, for a variety of reasons. Licences, not much to shout about. As to fairness, like beauty.... if it is not illegal ( as current laws stand) and immoral (mind the gap- retro views and new norms)... All this said I would like to see sp passing �38-40 We could all pray ( collectively for better affect). I take it u would buy business with this set of numbers then. I would suggest to any believer and supporter of capitalism, free market and rest bs, to buy house in NE or NW, convert it to bed sits fill it with disadvantaged (any) and get dss money while performing good deed for people of Britain.
notgreedy, You're not being fair in your comments here. Some of the liabilities are trade creditors ($4bn) yet you ignore current assets like receivables and cash. Some of the liabilities are deferred tax (5bn) which is purely an accounting item, not a true liability. Most purchasers would 'disregard' most of the intangibles/goodwill so this makes little difference. Buyers will look at cashflow, longevity of licences and not 'non cash' accounting entries. I'm guessing that you've not worked in an M&A department?
Put 0 to intangibles and tell me would u buy this. If anybody is to buy shp he she would have to have certain medical exams fiddled with. Btw, current + long liabilities $40bln give or take. https://www.investing.com/equities/shire-plc-balance-sheet
I also obtained the debt numbers form the same source, ie $19.1bn. This translates at today's rate to approx �14bn.
I accept a low dividend is not attractive but the free cashflow is being used to pay down the debt. This is a better use than a dividend at this stage. And just to be clear the debt was �14bn at 31/12/17 ($19.1bn) reduced by approx $3-4bn from previous year end. �22bn is inaccurate. Given debt is reducing (5-6 years to clear), this becomes less of an issue. As long the company is forecasted to produce consistent free cahflow from its modestly growing profits, then this risk reduces all the time. A takeover would help but I don't see that happening in the near future. But it is not the only thing that can rescue this share, imo. Better and clearer communication (eg re divisional split-off) and continued steady profits/cash generation will eventually turn sentiment snd this will be rerated irrespective of takeover speculation. But it is all going to take time. I'm hoping that we can look back in 2-3 years time and joke about the ridiculously low share price of �30 that was seen at the start of 2018.
Dividends of less than 1% and a company that is �22bn in debt might have something to do with it. Only a takeover can rescue these shares and you can be sure that the big institutions will start investing shortly before that happens!
notgreedy, This is the question that I struggle with too. If this is as good as it implies, where the hell are the big institutional buyers snapping up this bargain? Suspicion and uncertainty reign here.
http://www.nasdaq.com/symbol/shpg/short-interest As u can see shorts are insignificant, so why is sp depressed with such �great� eps, pe... Answer, maybe No buyers, Question, why?
I look at post tax profit, change in debt cost, mcap and yes sentiment. Btw, I�m about 3:1 long betting on jerking-irrational market behaviour, but I don�t see shp investment material cos very little difference between this and clln�s bod how they �grow�business. This business model is to often pump and dump dreamer. I thought �32 was bottom and ok valuation with sentiment as is. You would need one or two more of those general markets �corrections� and stops limits would be tripped sending sp to lower lows. �25? $ should go up, hitting equates ,cost of debt too, no divi( much, but far less than bonds with no risk ), political-regularly- Donald j. Issues.. Re rating already done, imo, sentiment and perception is the driver of sp now, otherwise how would u explain such �low PE?
Just to clarify, when I said EPS vs growth I meant revenue growth.