Special Sits Idea Forum
While all the stocks presented at MYST's latest buyside event could be considered undervalued, many offered significant (i.e. >50%) upside. The most differentiated ideas included: Blackbaud (improving fundamentals more apparent post-EVERFI divestiture; potential M&A target); HealthEquity (new legislation fuelling dramatic TAM expansion + bond portfolio repricing tailwinds); and JBS (multiple to expand as US listing drives increased passive ownership / index inclusion). More familiar names discussed included: Fluor (huge NuScale Power (SMR) monetisation catalyst not reflected in Street estimates); Teva Pharmaceutical (generics cash cow enabling innovative branded portfolio pipeline development); and Warner Bros. Discovery (well positioned for media consolidation wave amid forthcoming business separation).
Edition: 214
- 27 June, 2025
Healthcare
BTN lowers their earnings quality rating for TEVA to 1- (Strong Concern) - the company gave its lowest FCF guidance in years as it had already stretched payables by 29 days last year ($630m), pulled in more from sold A/R ($378m) and will need to start paying its opioid settlements. TEVA posts small EPS beats. It cut sales allowances to add 18-40c the last 3-years. EBITDA of $4.5-$4.9bn looks overstated as TEVA adds back recurring cash costs for litigation, some R&D, regulatory compliance… BTN sees EBITDA at $3.1-$3.3bn. TEVA’s debt to EBITDA is 3.45x. At $3.2bn and adding the opioid settlements to debt, the ratio is almost 7x.
Edition: 181
- 08 March, 2024