Event-Driven Legal℠ investment-research opportunities
MDC follows significant legal disputes to provide clients with actionable investment ideas that tend to be non-correlated with the market. They currently believe that the following companies will likely be involved in significant litigation in 2025 and 2026: Abbott Laboratories, Avadel Pharmaceuticals, Axsome Therapeutics, Bausch Health, Bayer, Burford Capital, Corcept Therapeutics, Exelixis, GSK, Harmony Biosciences, Johnson & Johnson, Liquidia, Live Nation, Reckitt and Sotera Health.
Edition: 205
- 21 February, 2025
Plenty of value on offer in Big Pharma
Healthcare
The sharp fall in the median implied to Y3 EBITM ratio for Willis Welby’s Healthcare coverage is all about Pharma. This leaves a median ratio for the subsector of just 94 which gets you good financial productivity, neutral revisions and a median consensus Y3 revenue growth rate of 7.4%. While the share price of Novo Nordisk discounts a lot of success, at the other end of the scale there are some companies where ratios seem to be getting more cautious without much obvious justification. GSK and Sanofi’s share prices are both consistent with a catastrophic future which makes no sense. Roche is not far behind. Given the normal dislocation of Pharma dynamics from wider economic ones this also looks like a major opportunity from a risk management perspective as well as from a value perspective.
Edition: 173
- 10 November, 2023
GSK (GSK LN) UK
Healthcare
GSK and other makers of Zantac are still facing potential liability in the United States. While a Federal Court Judge in West Palm Beach, Florida, issued a ruling on December 6, 2022, finding no "General Causation" between Zantac and Plaintiffs' cancer, that issue has now gone up on Appeal to the Eleventh Circuit in Appellate Case #22-12528. There also appears to be over 1,000 Plaintiffs remaining in consolidated Case #JCCP005150 at the Superior Court of California - County of Alameda. MDC will continue to follow these cases for its investor clients in all US venues.
Edition: 154
- 17 February, 2023
FTSE 100 Momentum Portfolio
Messels position themselves as a dedicated technical research team who work for fund managers at a fraction of the cost of a typical sell-side analyst. Highlights from their weekly report: 1) Informa - new Buy as it rallies from support at the bottom of the 12m range and gains relative momentum. 2) Rio Tinto - develops bases at medium term support. 3) Croda - finding 7-year price and relative uptrend support. 4) Imperial Brands - renews uptrends from support above 2-year price and relative bases. 5) GSK - reaching support at the bottom of the 10-year range.
Edition: 146
- 14 October, 2022
Get alpha from 10-K filing season
The Journal of Financial Economics (see here) proves how New Constructs’ Robo-Analyst technology overcomes material shortcomings in legacy data firms to provide superior fundamental data, earnings models, and research. During the Real Earnings Season (Feb 14-Mar 18), the Robo-Analyst found 38,314 Core Earnings, balance sheet, and valuation adjustments with a combined value of $18.9trn.
American Airlines (AAL) - Losses still bigger than many realise. Earnings Distortions totalled $3.5bn (173% of GAAP earnings).
GlaxoSmithKline (GSK) - Growing Profits + Cheap Valuation = Very Attractive Rating. Core Earnings of $6.9bn > GAAP earnings of $4.4bn.
International Flavors & Fragrances - Why understated profits aren’t always a good investment.
In addition, material weaknesses in internal controls were identified at several stocks including CBRE Group, Coupang and SeaWorld.
Edition: 132
- 01 April, 2022
GlaxoSmithKline (GSK LN) UK
Healthcare
Disputing Elliott Advisors’ 45% upside - Intron's SOTP analysis explains why this is unlikely to occur within the timeframes proposed. GSK Pharma (ex-ViiV) would have to trade on 59x 2022 PE and CHC on 30x 2022 PE whilst ViiV would have to trade on 12x 2022 EPS despite the DTG patent expiry in ~6 years. However, Intron does support Elliott’s view that the board needs more industry knowledge; plus the incentivisation scheme needs a major overhaul in-line with the most innovative companies in the sector such as Novartis and AstraZeneca.
Edition: 114
- 09 July, 2021