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Rigel Pharmaceuticals

3/27/2018

1 Comment

 
Rigel Pharmaceuticals is a biotechnology company discovering, developing and providing novel small molecule drugs that significantly improve the lives of patients with immune and hematologic disorders, cancer and rare diseases. The Company focuses on signaling pathways that are critical to disease mechanisms. Their current clinical programs include clinical trials of fostamatinib, an oral spleen tyrosine kinase (SYK) inhibitor, in several indications. Rigel has a New Drug Application (NDA) under review with the FDA for fostamatinib in patients with chronic immune thrombocytopenia (ITP). In addition, they have product candidates in development with partners BerGenBio AS, Daiichi Sankyo and Aclaris Therapeutics. 
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Rigel Pharmaceuticals, Inc., a biotechnology company, engages in the discovery and development of small molecule drugs for the treatment of immune and hematologic disorders, cancer, and rare diseases. The company's clinical programs include fostamatinib, an oral spleen tyrosine kinase inhibitor for immune thrombocytopenia purpura; and Phase II clinical study for autoimmune hemolytic anemia and immunoglobulin a nephropathy. Rigel Pharmaceuticals, Inc. has research and license agreements with Aclaris Therapeutics International Limited for the development and commercialization of janus kinase (JAK) inhibitors for the treatment of alopecia areata and other dermatological conditions; BMS for the discovery, development, and commercialization of cancer immunotherapies; AstraZeneca AB for the development and commercialization of R256, an inhaled JAK inhibitor; BerGenBio AS for the development and commercialization of AXL inhibitors in oncology; and Daiichi Sankyo to pursue research related to MDM2 inhibitors, a novel class of drug targets called ligases. The company was incorporated in 1996 and is based in South San Francisco, California.
(Summary) (Company) (Chart)
27 March 2018
Price $3.71
1yr Target $6.00
Analysts 6
Dividend $0.00
Payout Ratio 0.00%

1yr Cap Gain %
Yield 0.00%
1yr Tot Return %

P/E ---
PEG ---
Beta 1.31


EPS (ttm) $-0.61
EPS next yr $-0.20
Forward P/E ---
EPS next 5yr 61.00%
1yr Price Support ---

Market Cap $558.13 Mil
Revenues $4.50 Mil
Earnings $-78.00 Mil
Profit Margin ---

Quick Ratio 6.40
Current Ratio 6.40
Debt/Equity 0.00


1yr RevGR %
3yr RevGR %
5yr RevGR %

1yr EarnGR %
3yr EarnGR %
5yr EarnGR %

1yr DivGR %
3yr DivGR %
5yr DivGR %

ROA -82.70%
ROE -100.50%


Goals and Strategies
​
Rigel's goal is to become a commercial stage company actively involved in innovative drug discovery, development and commercialization, and become well-respected in the hematology space with healthcare providers, investors and within the biotech industry. They are building a strong commercial team to successfully execute on their commercialization plan for fostamatinib in ITP.

The Company's research team is focused on creating a portfolio of product candidates that may be developed as therapeutics for their own proprietary programs or developed by potential collaborative partners. Rigel recognizes that the product development process is subject to both high costs and a high risk of failure. They believe that identifying a variety of product candidates and strategically partnering with other pharmaceutical companies may minimize the risk of failure, fill the product pipeline gap at major pharmaceutical companies, and ultimately increase the likelihood of advancing clinical development and potential commercialization of the product candidates.


The key elements to their business and scientific strategy are to:
  • capitalize on the opportunity to potentially commercialize fostamatinib in the United States, where they believe they can successfully compete;
  • outlicense European, Asian and rest of the world rights to fostamatinib;
  • develop and commercialize fostamatinib for possible additional indications, including AIHA and IgAN;
  • develop a diverse portfolio of drug candidates that address a focused brand of therapeutic indications or that represent significant market opportunities;
  • utilize their discovery engine to discover and validate new product candidates in a focused range of therapeutic indications; and
  • develop drug candidates and establish strategic collaborations with pharmaceutical and biotechnology companies to further develop and market their product candidates. 
​

Recent Events within the Company
 
In November 2017, Rigel announced that they completed enrollment of the second cohort of our Phase 2 study of fostamatinib in IgA Nephropathy (IgAN).

In October 2017, Rigel reported the following:
  • the Food and Drug Administration (FDA) completed its mid-cycle review and indicated that it did not plan on holding an Oncology Drugs Advisory Committee (ODAC) meeting to discuss the Company's NDA for fostamatinib in patients with chronic ITP;
  • Rigel completed enrollment of Stage 1 of our Phase 2, open-label, multi-center, two-stage study of their investigational drug fostamatinib for the treatment of patients with warm Autoimmune Hemolytic Anemia (AIHA) and that on a preliminary basis, the study has achieved its pre-specified endpoints for Stage 1; and
  • Rigel completed an underwritten public offering in which they sold 20,815,000 shares of common stock pursuant to an effective registration statement at a price to the public of $3.35 per share and received net proceeds of approximately $65.3 million.

In August 2017, Rigel announced that they have selected a molecule from their Interleukin-1 receptor-associated kinase (IRAK) program for preclinical development.

In June 2017, Rigel announced that the FDA accepted the Company's NDA for the use of fostamatinib disodium in patients with chronic ITP. They also announced that the FDA set an expected action date of April 17, 2018 to complete its review of fostamatinib under the Prescription Drug User Fee Act (PDUFA).

In April 2017, Rigel announced the following:
  • Rigel submitted an NDA with the FDA for the use of fostamatinib in patients with chronic ITP; and
  • the FDA conditionally accepted the proprietary name TAVALISSETM for their investigational product candidate, fostamatinib disodium, an oral spleen tyrosine kinase (SYK) inhibitor.

In February 2017, Rigel completed an underwritten public offering in which they sold 23,000,000 shares of common stock pursuant to an effective registration statement at a price to the public of $2.00 per share. The Company received net proceeds of approximately $43.0 million. 

Product Development Programs
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Fostamatinib—Immune Thrombocytopenic Purpura

Chronic ITP affects an estimated 65,000 adult patients in the U.S. In patients with ITP, the immune system attacks and destroys the body’s own blood platelets, which play an active role in blood clotting and healing. ITP patients can suffer extraordinary bruising, bleeding and fatigue as a result of low platelet counts. Current therapies for ITP include steroids, blood platelet production boosters that imitate thrombopoietin (TPOs) and splenectomy.

Taken in tablet form, fostamatinib blocks the activation of SYK inside immune cells. ITP is typically characterized by the body producing antibodies that attach to healthy platelets in the blood stream. Immune cells recognize these antibodies and affix to them, which activates the SYK enzyme inside the immune cell, and triggers the destruction of the antibody and the attached platelet. When SYK is inhibited by fostamatinib, it interrupts this immune cell function and allows the platelets to escape destruction. The results of Rigel's Phase 2 clinical trial, in which fostamatinib was orally administered to sixteen adults with chronic ITP, published in Blood, showed that fostamatinib significantly increased the platelet counts of certain ITP patients, including those who had failed other currently available agents.

The Company met with the FDA for an end-of-Phase 2 meeting for fostamatinib in ITP. Based on that meeting, they designed a Phase 3 clinical program, called fostamatinib in thrombocytopenia (FIT), in which a total of 150 ITP patients were randomized into two identical multi-center, double-blind, placebo-controlled clinical trials. The patients were diagnosed with persistent or chronic ITP, and had blood platelet counts consistently below 30,000 per microliter of blood. Two-thirds of the subjects received fostamatinib orally at 100 mg bid (twice daily) and the other third received placebo on the same schedule. Subjects were expected to remain on treatment for up to 24 weeks. At week four of treatment, subjects who failed to meet certain platelet count and met certain tolerability thresholds could have their dosage of fostamatinib (or corresponding placebo) increased to 150 mg bid. The primary efficacy endpoint of this program was a stable platelet response by week 24 with platelet counts at or above 50,000 per microliter of blood for at least four of the final six qualifying blood draws. In August 2015, the FDA granted the Company's request for Orphan Drug designation for fostamatinib for the treatment of ITP. On April 1, 2016, Rigel announced that they had completed enrollment in the FIT Phase 3 clinical program.


On August 30, 2016, Rigel announced the results of the first study, reporting that fostamatinib met the study’s primary efficacy endpoint. The study showed that 18% of patients receiving fostamatinib achieved a stable platelet response compared to none receiving a placebo control (p=0.0261). On October 20, 2016, the Company announced the results of the second study, reporting that the response rate was 18%, consistent with the first study. However, one patient in the placebo group (4%) achieved a stable platelet response, therefore the difference between those on treatment and those on placebo did not reach statistical significance (p=0.152) and the study did not meet its primary endpoint. When the data from both studies are combined, however, this difference is statistically significant (p=0.007). In the combined datasets for the FIT studies, patients who met the primary endpoint had their platelet counts increase from a median of 18,500/uL of blood at baseline to more than 100,000/uL at week 24 of treatment. These patients had improvements in platelet count and typically did so within weeks of initiating treatment, providing early feedback as to whether fostamatinib may be a viable option for treating their ITP. In the combined datasets, the frequency of patients who achieved a stable platelet response was statistically superior in the fostamatinib group versus the placebo group in the following subgroups: prior splenectomy or not; prior exposure to TPO agents or not; platelet counts below or above 15,000/uL of blood at baseline, demonstrating that the effect of fostamatinib is consistent across various clinical and treatment backgrounds.

Patients from the FIT studies were given the option to enroll in a long-term open-label extension study and receive treatment with fostamatinib, also a Phase 3 trial. A total of 123 patients enrolled in this study. All the patients who responded to fostamatinib in the FIT studies and enrolled in the long-term open-label extension study maintained a median platelet count of 106,500/uL at a median of 16 months. In addition, there were 44 placebo non-responders that enrolled in the long- term open-label extension study. 41 of these patients had at least 12 weeks of follow-up. Of those, 9 patients (22%) have achieved a prospectively defined stable platelet response, which is statistically significant (p=0.0078) and similar to the response rate fostamatinib achieved in the parent studies.

A stable response was defined as a patient achieving platelet counts of greater than 50,000/uL on more than 4 of the 6 visits between weeks 14 and 24, without rescue medication. In the post-study analysis performed by the Company, a clinically-relevant platelet response was defined to include patients achieving one platelet count over 50,000/uL during the first 12 weeks of treatment, in absence of rescue medication, but who did not otherwise meet the stable response criteria. Once the platelet count of greater than 50,000/uL is achieved, a loss of response was defined as two consecutive platelet counts of less than 30,000/uL in any subsequent visits. In the combined dataset of both stable and clinically-relevant platelet responders for the FIT studies, the response rate was 43% (43/101), compared to 14% (7/49) for placebo (p=0.0006).

The most frequent adverse events were gastrointestinal-related, and the safety profile of the product was consistent with prior clinical experience, with no new or unusual safety issues uncovered. Rigel submitted an NDA for fostamatinib in ITP in April 2017, which was accepted by the FDA in June 2017, with an action date for the FDA to complete its review by April 17, 2018, under the PDUFA. On October 2, 2017, Rigel announced that the FDA did not plan on holding an ODAC meeting to discuss the NDA for fostamatinib in ITP. Additionally, the FDA indicated that the review of fostamatinib is proceeding according to the standard internal review timeline as described in the Guidance on Good Review Management Principles and Practices for PDUFA Products. 
​

Clinical Stage Programs

Fostamatinib—IgAN Immunoglobulin A Nephropathy (IgAN) is an autoimmune disease that severely affects the functioning of the kidneys. An estimated 12,000 Americans are diagnosed with this type of glomerulonephritis each year, with 25% of whom will eventually require dialysis and/or kidney transplantation over time. IgAN is characterized by the deposition of IgA immune complexes in the glomeruli of the kidneys leading to an inflammatory response and subsequent tissue damage that ultimately disrupts the normal filtering function of the kidneys. By inhibiting SYK in kidney cells, fostamatinib may block the signaling of IgA immune complex receptors, reduce the deposition of IgA immune complexes and arrest or slow destruction of the glomeruli.

Rigel's Phase 2 clinical trial in patients with IgAN, called SIGN (SYK Inhibition for Glomerulonephritis) completed enrollment for its first and second cohorts. In January 2017, the Company announced that the first cohort in the Phase 2 study of fostamatinib in IgAN was completed in various centers throughout Asia, the U.S. and Europe. This cohort evaluated the efficacy, safety, and tolerability of the lower dose of fostamatinib (100mg BID, n=26; placebo n=12) as measured by change in proteinuria, renal function, and histology (comparing the pre- and post-study renal biopsies). The primary efficacy endpoint was the mean change in proteinuria from baseline at 24 weeks. The study found that at 24 weeks, fostamatinib was well tolerated with a good safety profile. The initial data suggest a trend towards a greater reduction in proteinuria in fostamatinib treated patients relative to placebo. The second cohort evaluates a higher dose of fostamatinib (150mg BID) and completed enrollment in August 2017. Rigel expects the study to be completed by April 2018.

Fostamatinib—AIHA AIHA is a rare, serious blood disorder where the immune system produces antibodies that result in the destruction of the body's own red blood cells. Symptoms can include fatigue, shortness of breath, rapid heartbeat, jaundice or enlarged spleen. While no medical treatments are currently approved for AIHA, physicians generally treat acute and chronic cases of the disorder with corticosteroids, other immuno-suppressants, or splenectomy. Research has shown that inhibiting SYK with fostamatinib may reduce the destruction of red blood cells. This disorder affects an estimated 40,000 Americans, for whom no approved treatment options currently exist.

Rigel's Phase 2 clinical trial, also known as SOAR study, is currently enrolling patients with warm AIHA in the second stage of the trial. The trial is an open-label, multi-center, two-stage study that will evaluate the efficacy and safety of fostamatinib in patients with warm AIHA who have previously received treatment for the disorder, but have relapsed. Stage 1 recently completed enrollment for 19 patients (17 patients evaluable for efficacy) who received 150 mg of fostamatinib orally twice a day for a period of 12 weeks, with an option of entering into a long-term extension study. The patients returned to the clinic every two weeks for blood draws and medical assessment. The primary efficacy endpoint of this study was to achieve increased hemoglobin levels by week 12 of greater than 10 g/dL, and greater than or equal to 2 g/dL higher than baseline.

​In October 2017, Rigel announced that, on a top-line, preliminary basis, Stage 1 of the AIHA study enrolled 17 patients who have had at least one post-baseline hemoglobin measure. In January 2018, the Company also announced the updated top-line data as of December 2017 for this open-label study of which 47% of these patients (8 patients out of 17) have responded to fostamatinib treatment. Of the 17, six patients, including the last two patients enrolled, responded during the 12-week evaluation period and an additional two patients met the response criteria in the extension study after 12 weeks of dosing. In February 2018, an additional patient in the Stage 1 extension study met the response criteria. As of February 2018, 53% of evaluable patients (9 of 17) have responded to fostamatinib treatment. The safety profile was consistent with the existing fostamatinib safety database. This will be presented at the Thrombosis and Hemostasis Societies of North America meeting in San Diego, California in March 2018. Given that the Stage 1 of the study met its primary efficacy endpoint, Rigel has begun enrollment of Stage 2 of this study, in which 20 patients will be enrolled under the same protocol. In January 2018, the FDA granted the Company's request for Orphan Drug designation for fostamatinib for the treatment of AIHA. 


Partnered Clinical Programs

R548 (ATI-50001 and ATI-50002) - Aclaris. Aclaris is developing ATI-50001 and ATI-50002 an oral and topical Janus Kinase (JAK) 1/3 inhibitor. ATI- 50001 is being developed as an oral treatment for patients with AA, including the more severe forms of AA that result in total scalp hair loss, known as alopecia totalis, and total hair loss on the scalp and body, known as alopecia universalis. This Phase 1 cross-over trial was conducted in 12 healthy volunteers at one investigational center in the U.S. to assess the safety, bioavailability, and pharmacodynamics of ATI-50001.

In the trial, treatment with ATI-50001 capsules was well tolerated, with a safety profile similar to placebo. No clinically significant laboratory abnormalities were observed. These data are consistent with results from an earlier Phase 1 clinical trial in 44 healthy volunteers in which the study drug was well tolerated at all doses, with a safety profile similar to placebo. During the fourth quarter of 2017, three Phase 2 studies with the topical treatment ATI-50002 in AA and Vitilago were initiated with results expected in 2018.

BGB324 - BerGenBio. BerGenBio’s first-in-class selective AXL kinase inhibitor, BGB324, has demonstrated compelling efficacy as a single agent, and in combination with standard of care cancer therapies and checkpoint inhibitors, thereby supporting clinical utility across multiple cancers in preclinical studies. Early clinical studies in healthy volunteers and cancer patients have shown BGB324 to be well-tolerated with a favorable safety profile, and encouraging evidence of single agent and combination activity in AML and NSCLC. A strong correlation has also been observed with predictive biomarkers and the patients that respond. BGB324 has received Orphan Drug Designation in the U.S. for AML.

BerGenBio is currently planning Phase 2 studies with BGB324 as a single agent in relapsed acute myeloid leukaemia (AML) and myelodysplastic syndrome (MDS); and in combination with erlotinib (Tarceva®) in advanced (EGFR- positive) NSCLC. BerGenBio is also opening Phase 2 studies with BGB324 in combination with KEYTRUDA® (pembrolizumab) in non-small cell adenocarcinoma of the lung and triple negative breast cancer (TNBC) in collaboration with another company.

DS-3032 - Daichi. DS-3032 is an investigational oral selective inhibitor of the murine double minute 2 (MDM2) protein currently being investigated by Daiichi in three Phase 1 clinical trials for solid and hematological malignancies including acute myeloid leukemia (AML), acute lymphocytic leukemia (ALL), chronic myeloid leukemia (CML) in blast phase, lymphoma and myelodysplastic syndrome (MDS). DS-3032 has not been approved by any regulatory authority for uses under investigation.

​Preliminary safety and efficacy data from a Phase 1 study of DS-3032 suggests that DS-3032 may be a promising treatment for hematological malignancies including relapsed/refractory AML and high-risk MDS. Evaluation of additional dosing schedules of DS-3032 is underway and combination studies currently being planned by Daiichi. 


​My Strategy Going Forward.


I found Rigel Pharmaceuticals while researching information on potential options trades. Rigel surfaced as a low priced security with large options premiums and upon further research it became apparent that it had a product that was about to be approved by the FDA. It became apparent that this company could soon break higher so buying the shares became an easy decision to make.

On the other hand, with the FDA there's always the potential that the drug under review wouldn't be approved so that information put enough uncertainty in the shares that the option premiums increased. 

So at this point it's becoming an easy decision to begin accumulating these shares this week. My expectation is to buy shares of this company this week in anticipation of FDA approval sometime around 17 April. I also intend to monitor the options market to try to anticipate the direction of the move after the FDA's decision. 

A bull strategy would be to sell puts and buy calls. A bear strategy would be to sell calls and buy puts. But since I usually don't like to buy options except in the case of covering a position, I'll initially concentrate on the selling of options. The key here is to be nimble and not afraid to reverse a position quickly, if needed. With the FDA decision expected on 17 April and the options expiring on 20 April, flexibility and pre-planning will be necessary in executing this strategy.

Wish me luck. 
 
1 Comment

Global Brass and Copper Holdings

3/20/2018

0 Comments

 
Global Brass and Copper Holdings, Inc. is a leading, value-added converter, fabricator, processor and distributor of specialized non-ferrous products, including a wide range of sheet, strip, foil, rod, tube and fabricated metal component products. While the Company primarily processes copper and copper-alloys, they also re-roll and form certain other metals such as stainless steel, carbon steel and aluminum. Using processed scrap, virgin metals and other refined metals, the Company engages in metal melting and casting, rolling, drawing, extruding, welding and stamping to fabricate finished and semi-finished alloy products. The majority of the Company's operations and sales activities are focused in North America under the Olin Brass, Chase Brass and A.J. Oster brand names.

The Company's products are used in a variety of applications across diversified markets, including the building and housing, munitions, automotive, transportation, coinage, electronics/electrical components, industrial machinery and equipment and general consumer markets. They access these markets through direct mill sales, a captive distribution network and third-party distributors. They hold the exclusive production and distribution rights in North America for a free machining, lead-free brass rod product, which they sell under the Green Dot and Eco Brass brand names. The vertical integration of Olin Brass's manufacturing capabilities and A.J. Oster's distribution capabilities allows Global Brass and Copper to access customers with a wide variety of volume and service needs.

Global Brass and Copper services nearly 1,600 customers in 23 countries across four continents. They also employ almost 1,900 people and operate 11 manufacturing facilities and distribution centers across the United States, Puerto Rico and Mexico.

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​Global Brass and Copper Holdings, Inc.
converts, fabricates, processes, and distributes specialized non-ferrous products in the United States, the Asia Pacific, and Mexico. The company operates in three segments: Olin Brass, Chase Brass, and A.J. Oster. The Olin Brass segment manufactures, fabricates, and converts specialized copper and brass sheets, strips, foils, tubes, and fabricated products; and rerolls and forms other alloys, such as stainless steel, carbon steel, and aluminum. Its products are used in the building and housing, automotive, electronics/electrical components, munitions, and coinage markets. The Chase Brass segment manufactures and supplies brass rods in round, hexagonal, and other shapes for use in the building and housing, transportation, electronics/electrical components, and industrial machinery and equipment markets. The A.J. Oster segment processes and distributes primarily copper, brass, and aluminum sheets, strips, and coated products for use in the building and housing, automotive, and electronics/electrical components markets. The company sells its products under the Olin Brass, Chase Brass, A.J. Oster, Green Dot, and Eco Brass brands through its direct mill sales, distribution network, and third-party distributors. Global Brass and Copper Holdings, Inc. was founded in 2007 and is headquartered in Schaumburg, Illinois.
(Summary) (Company) (Chart)
18 March 2018
Price $33.95
1yr Target $45.00
Analysts 1
Dividend $0.24
Payout Ratio 9.12%

1yr Cap Gain 32.54%
Yield 0.70%
1yr Tot Return 33.24%

P/E 12.89
PEG 1.29
Beta 0.53


EPS (ttm) $2.63
EPS next yr $3.25
Forward P/E 10.45
EPS next 5yr 10.00%
1yr Price Support $32.50

Market Cap $733.66 Mil
Revenues $1.56 Bil
Earnings $58.20 Mil
Profit Margin 3.71%

Quick Ratio 1.60
Current Ratio 2.80
Debt/Equity 2.21


1yr RevGR 16.59%
3yr RevGR -3.01%
5yr RevGR ---

1yr EarnGR 54.36%
3yr EarnGR 15.40%
5yr EarnGR ---

1yr DivGR 45.33%
3yr DivGR 13.13%
5yr DivGR ---

ROA 7.90%
ROE 40.10%


The Company

Global Brass and Copper Holdings is a leading value-added converter, fabricator, processor and distributor of specialized non-ferrous products, including a wide range of sheet, strip, foil, rod, tube and fabricated metal component products. While the Company primarily process copper and copper alloys, they also reroll and form certain other metals such as stainless steel, carbon steel and aluminum. Using processed scrap, virgin metals and other refined metals, they engage in metal melting and casting, rolling, drawing, extruding, welding and stamping to fabricate finished and semi-finished alloy products. Key attributes of copper and copper alloys are conductivity, corrosion resistance, strength, malleability, cosmetic appearance and bactericidal properties.

Unlike traditional metals companies, particularly those that engage in mining, smelting and refining activities, Global Brass and Copper is purely a metal converter, fabricator, processor and distributor, and they do not attempt to generate profits from fluctuations in metal prices. The Company's financial performance is driven by metal conversion economics, not by the underlying movements in the price of copper and the other metals. The Company strives to match the timing, quantity and price of metal sales with the timing, quantity and price of replacement metal purchases. This practice, along with their toll processing operations and last-in, first-out inventory accounting methodology, substantially reduces the financial impact of metal price movements on earnings and operating margins.

The Company's products are used in a variety of applications across diversified markets, including the building and housing, munitions, automotive, transportation, coinage, electronics and electrical components, industrial machinery and equipment, signage, and general consumer markets. The Company accesses these markets through direct mill sales, their captive distribution network and third-party distributors. They hold the exclusive production and distribution rights in North America for a lead-free brass rod product, which sells under the Green Dot and Eco Brass brands. The Company believes they are the only domestic copper and brass sheet manufacturer with captive distribution and service center operations, a competitive advantage that allows them to service and access customers with a wide variety of volume and service needs.

Global Brass and Copper services 4,500 customers in 28 countries and across four continents. They employ 1,900 people and operate 16 manufacturing facilities and distribution centers across the United States, Puerto Rico and Mexico. 


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Olin Brass

In addition to manufacturing, fabricating and converting specialized copper and brass sheet, strip, foil, tube and fabricated products, Olin Brass also rerolls and forms other alloys such as stainless steel, carbon steel and aluminum. Sheet and strip is generally manufactured from copper and copper-alloy scrap.

Olin Brass manufactures its wide variety of products through four sites in North America. It is not uncommon for Olin Brass to produce 50 different alloys, approximately 30% of which could be high performance alloys (“HPAs”).


Olin Brass’s integrated brass mill in East Alton, Illinois is its main operating facility, which melts metal and produces strip products that are either sold directly to external customers, sold to its affiliate, A.J. Oster, or shipped to Olin Brass’s downstream operations for further value-added processing. Olin Brass’s downstream operations include:
  • a stamping operation located in East Alton;
  • a rolling mill in Waterbury, Connecticut with rolling, annealing, leveling, plating and slitting capabilities for various products (“Somers Thin Strip”), including stainless steel thin strip;
  • a manufacturing facility in Bryan, Ohio specializing in products sold in the automotive and electronics / electrical components markets; and
  • a manufacturing facility in Cuba, Missouri that produces high frequency welded copper-alloy tube for heat transfer, utility, decorative, automotive and plumbing applications.

Olin Brass’s products are sold to original equipment manufacturers, other external customers, distributors and rerollers or to its affiliate, A.J. Oster. In 2017, 19% of Olin Brass’s products were shipped to distribution customers, which includes its affiliate A.J. Oster. In 2017, approximately 17% of Olin Brass’s domestic copper-based shipments were to A.J. Oster. 

Munitions Market. Olin Brass manufactures products utilized in both the military and commercial munitions markets, such as strip and cups, that are used to produce shot shells, bullet jackets, centerfire, rimfire and small caliber military munitions. Customers in this market include major munitions producers in the U.S., including those producing small caliber ammunition for the U.S. military. Demand within this market is affected by the U.S. government’s security policies and troop size, as well as consumer demand for firearms and munitions. While munitions demand is predominantly domestic, occasional opportunities arise to supply U.S. alliance partners with these products.

Coinage Market. Olin Brass supplies strip for use in the production of coins (no pennies) primarily for the United States Mint, for which they are a key supplier contracted into 2022. They have been a highly regarded supplier to the United States Mint for over 40 years as their long-term contracts have historically been renewed at termination. The demand within this market is affected by the level of activities in retail transactions, the use of vending machines, and the trends affecting forms of payment.

Automotive Market. Olin Brass manufactures both strip and fabricated products used as electronic and electrical connectors for use in automobiles. These products are made with HPAs, suitable for applications requiring high reliability, high temperature and low insertion force. For example, these electrical connectors, along with lead frames manufactured by us, are used in junction boxes, wiring harnesses, ignition and battery systems, lighting and media systems within vehicles. Customers in this market include primary automotive connector suppliers in the U.S. Historically the business in this market remained largely regional in the U.S. Demand within this market is affected by the level of consumer spending on automobiles, which is significantly dependent on overall economic conditions and the amount of electrical components contained within automobiles. 

Building and Housing Market. Olin Brass manufactures a variety of strip, welded tube and stamped parts used in commercial and residential buildings, such as faucets, locksets, decorative door hardware and hinges, which require workability, corrosion resistance and attractive appearance. Olin Brass also manufactures strip for products requiring high electrical conductivity, such as plug outlets, switches, lamp shells, other wiring devices, industrial controls, circuit breakers and switchgears. These products are generally manufactured with copper and copper-alloy sheet and strip, both HPAs and standard alloys, as well as copper- alloy welded tube. Customers in this market are OEMs producing building and housing products. Olin Brass also supplies building and housing products in China through Olin Luotong Metals.

Electronics and Electrical Components Market. Olin Brass manufactures strip used in integrated circuit sockets for circuit boards, electrical connectors for laptop computers and similar devices, consumer electronics and appliances, and foils for flexible circuit applications. The strip manufactured in this market is high in HPA content and is sold directly to end-use customers and distributors. ​Customers in this market are primarily electronics manufacturers that operate globally. A portion of these customers is serviced through A.J. Oster, and the remainder is supplied directly by Olin Brass, with its Somers Thin Strip facility providing the foil products on a global scale. 


Chase Brass

Chase Brass primarily manufactures solid brass rod, in round, hexagonal and other shapes, ranging from 1/4 inch to 4 1/2 inches in diameter. Brass rod is generally manufactured from copper or copper-alloy scrap and all of Chase Brass’s rod is manufactured at its Montpelier, Ohio facility. Chase Brass customers machine, bore out, or otherwise process the rod for various applications used in a variety of markets. Brass rod is primarily used for forged and machined products, such as valves and fittings. Key attributes of brass rod include its machinability, corrosion resistance and moderate strength.

Chase Brass has been able to capitalize on opportunities arising from regulation limiting lead content in potable water plumbing fixtures. Our green product portfolio, including Eco Brass®, has grown significantly over the past few years as customers switch from leaded to non or low-leaded products in certain applications. 

Building and Housing Market. Chase Brass manufactures brass rod for use in faucets, valves and fittings used in residential and commercial construction. Chase Brass produces a number of low-lead and lead-free products, or “green portfolio” products, which comply with certain state and federal laws that became effective in January 2014. This legislation defines the allowed level of lead content in products used in plumbing and drinking water applications. Chase Brass’s Green Dot rod, Eco Brass rod and Eco Brass ingot products are part of the green portfolio, and Chase Brass is the exclusive licensee of the intellectual property rights for their production, sale and distribution in North America. Chase Brass also manufactures other non-patented green portfolio products. Green portfolio products accounted for approximately 20% of pounds shipped by Chase Brass in 2017.

Industrial Machinery and Equipment Market. Chase Brass manufactures brass rod which is further machined into industrial valves and fittings. Demand within this market is affected by capital spending levels, U.S. gross domestic product growth and industrial production growth in the U.S. Customers in this market include various major diversified manufacturers and a variety of screw machine companies supporting OEMs.

Transportation Market. Chase Brass manufactures brass rod for applications in heavy trucks and automobiles. Specific applications include heavy truck braking systems, tire valves, temperature sensors and various truck and automotive fittings. Demand within this market is affected by levels of transportation activity, levels of maintenance capital spending by transportation companies and the level of commercial truck fleet replacement activity, all of which are affected significantly by overall economic conditions. Customers in this market include major OEMs in the transport industry and customers who support domestic automotive production. 

Electronics and Electrical Components Market. ​Chase Brass manufactures brass rod used for telecommunication applications, including products such as coaxial connectors and traps and filters for cable television, as well as larger connectors supporting the cell tower industry. Demand within this market is affected by consumer spending, new home construction, and technologies affecting communication devices and methods, such as wi-fi. Customers within this market include major manufacturers of specialty products for use in home and commercial construction, both of which are very dependent on overall economic conditions. We believe a significant portion of shipments in this market segment are directly associated with the building and housing market and transportation markets. 


A.J. Oster

A.J. Oster has historically been a processor and distributor of primarily copper and copper-alloy sheet, strip, and foil. However, with the acquisition of the Alumet business on November 1, 2017, A.J. Oster significantly expanded its product portfolio into aluminum sheet and coated aluminum products. The acquisition also deepened its presence in the signage (aluminum) and roofing (copper and copper-alloy) markets within the building and housing industry. A.J. Oster historically operated six strategically located service centers in the U.S., Puerto Rico, and Mexico and, with the Alumet acquisition, added five more service centers, including those in the South and Southeast where A.J. Oster had no presence.

Key A.J. Oster competitive advantages are: short lead-times with high reliability, high level of service, small-quantity deliveries, high quality metal, and a broad alloy breadth offering, including HPAs from Olin Brass. These capabilities, combined with A.J. Oster’s operations of precision slitting, hot tinning, traverse winding, cutting, coating, and special packaging, provide value to a broad customer base.

In 2017, Olin Brass provided A.J. Oster with 54% of its copper-based products. Aurubis AG is A.J. Oster’s second largest supplier after Olin Brass, supplying approximately 26% of A.J. Oster’s copper-based products in 2017. Many of the coils purchased from Olin Brass and Aurubis are full- width and require slitting. 

Building and Housing Market. A.J. Oster distributes copper-alloy strip and aluminum foil used for products in commercial and residential applications. The primary applications are electrical, hardware, signage, and roofing. Electrical products are primarily for wiring devices. Other electrical applications include switchgears, switches, controls and circuit breakers. Several of our customers for these products are in Puerto Rico or Mexico. A.J. Oster’s capabilities are well-suited for these geographic locations and the stringent service requirements of the electrical market because A.J. Oster is able to provide customers with high-quality metals, in less-than-truckload quantities, and can deliver products shortly after receiving orders. Hardware products include products such as faucets, window trim, locksets, hinges and kick plates. A.J. Oster provides aluminum coated products into the signage industry for a wide variety of government and commercial purposes. With the Alumet acquisition, A.J. Oster now provides copper and copper-alloy sheet and strip product into the architectural roofing industry for both commercial and residential buildings.

Automotive Market. A.J. Oster distributes copper-alloy strip and aluminum foil used in automobiles. Primary customer products are electrical connectors, automotive trim and heat exchangers. A.J. Oster’s subsidiary in Queretaro, Mexico is strategically and geographically well-positioned to take advantage of the growing number of second-tier automobile component suppliers in Mexico. Demand within this market is affected by the level of consumer spending on automobiles, which is significantly dependent on overall economic conditions. 

Electronics and Electrical Components Market. A.J. Oster distributes copper-alloy strip used for electrical connectors in computers, consumer electronics and automobiles. ​The demand within this market is affected by consumer spending and trends in electronics, which may fluctuate significantly as a result of economic conditions. 

My Path Forward

I wish I had bought shares of this company three weeks ago as it reversed from below $30 per share so if someone wanted to wait, that's what you'd be waiting for. That's also the place I'd sell put options. But I'm afraid these shares have already started to more higher and a pullback is fading into the past. With a price target of $45, these shares could return a very nice pile of cash to traders wanting to move into and out of these shares. So there's a lot of strategies that can be used with these shares. 

For me personally, these shares are on my watch list and I believe I'll begin accumulating them soon. With a one year estimated return on investment of over 30%, this will be a great addition to my portfolio.  
0 Comments

Vanda Pharmaceuticals

3/13/2018

0 Comments

 
Vanda Pharmaceuticals is a global biopharmaceutical company focused on the development and commercialization of innovative therapies to address high unmet medical needs and improve the lives of patients. Vanda commenced its operations in 2003 and their product portfolio includes:
  • HETLIOZ® (tasimelteon), a product for the treatment of Non-24-Hour Sleep-Wake Disorder (Non-24), was approved by the U.S. Food and Drug Administration (FDA) in January 2014 and launched commercially in the U.S. in April 2014. In July 2015, the European Commission (EC) granted centralized marketing authorization with unified labeling for HETLIOZ® for the treatment of Non-24 in totally blind adults. HETLIOZ® was commercially launched in Germany in August 2016. HETLIOZ® has potential utility in a number of other circadian rhythm disorders and is presently in clinical development for the treatment of Pediatric Non-24, Jet Lag Disorder and Smith-Magenis Syndrome (SMS).
  • Fanapt® (iloperidone), a product for the treatment of schizophrenia, the oral formulation of which was approved by the FDA in May 2009 and launched commercially in the U.S. by Novartis Pharma AG (Novartis) in January 2010. Novartis transferred all the U.S. and Canadian commercial rights to the Fanapt® franchise to us on December 31, 2014. Additionally, our distribution partners launched Fanapt® in Israel and Mexico in 2014. Fanapt® has potential utility in a number of other disorders. An assessment of new Fanapt® clinical opportunities is ongoing.
  • Tradipitant (VLY-686), a small molecule neurokinin-1 receptor (NK-1R) antagonist, which is presently in clinical development for the treatment of chronic pruritus in atopic dermatitis and the treatment of gastroparesis.
  • VTR-297 (formerly Trichostatin A), a small molecule histone deacetylase (HDAC) inhibitor.
  • VQW-765 (formerly AQW-051), a Phase II alpha-7 nicotinic acetylcholine receptor partial agonist.
  • Portfolio of Cystic Fibrosis Transmembrane Conductance Regulator (CFTR) activators and inhibitors. 

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​Vanda Pharmaceuticals Inc.
, a biopharmaceutical company, focuses on the development and commercialization of products for the treatment of central nervous system disorders. The company's marketed products include HETLIOZ (tasimelteon), a product for the treatment of non-24-hour sleep-wake disorders; and Fanapt (iloperidone), a product for the treatment of schizophrenia. Its products also include Tradipitant (VLY-686), a small molecule neurokinin-1 receptor antagonist that is under the clinical development for the treatment of chronic pruritus in atopic dermatitis and gastroparesis; VTR-297, a small molecule histone deacetylase inhibitor, which is in development for the treatment of hematologic malignancies; and VQW-765, a Phase II alpha-7 nicotinic acetylcholine receptor partial agonist. In addition, the company is developing cystic fibrosis transmembrane conductance regulator activators and inhibitors. It markets its products in the United States, Canada, Europe, Israel, and Mexico. Vanda Pharmaceuticals Inc. was incorporated in 2002 and is headquartered in Washington, the District of Columbia.
(Summary) (Company) (Chart)
11 March 2018
Price $19.90
1yr Target $20.67
Analysts 6
Dividend $0.00
Payout Ratio 0.00%

1yr Cap Gain 3.86%
Yield 0.00%
1yr Tot Return 3.86%

P/E ---
PEG ---
Beta 1.01


EPS (ttm) $-0.35
EPS next yr $0.72
Forward P/E 27.64
EPS next 5yr 15.70%
1yr Price Support $11.30

Market Cap $873.81 Mil
Revenues $165.10 Mil
Earnings $-15.60 Mil
Profit Margin ---

Quick Ratio 2.40
Current Ratio 2.40
Debt/Equity 0.00


1yr RevGR %
3yr RevGR %
5yr RevGR %

1yr EarnGR %
3yr EarnGR %
5yr EarnGR %

1yr DivGR %
3yr DivGR %
5yr DivGR %

ROA -7.50%
ROE -11.90%


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Products

Hetlioz 

​
In January 2014, HETLIOZ® was approved in the U.S. for the treatment of Non-24. Non-24 is a serious, rare and chronic circadian rhythm disorder characterized by the inability to entrain (synchronize) the master body clock with the 24-hour day-night cycle. HETLIOZ is the first FDA approved treatment for Non-24. HETLIOZ is a melatonin agonist of the human MT1 and MT2 receptors, with greater specificity for MT2. These receptors are thought to be involved in the control of circadian rhythms. HETLIOZ is believed to reset the master body clock in the suprachiasmatic nucleus, located in the hypothalamus, resulting in the entrainment and alignment of the body’s melatonin and cortisol rhythms to the 24-hour day-night cycle. HETLIOZ was launched commercially in the U.S. in April 2014. In addition, in July 2015, the EC granted centralized marketing authorization with unified labeling for HETLIOZ for the treatment of Non-24 in totally blind adults and included post-marketing commitments related to a pediatric investigation plan. This authorization is valid in the 28 countries that are members of the European Union (E.U.), as well as European Economic Area members Iceland, Liechtenstein and Norway. HETLIOZ was launched commercially in Germany in August 2016.

In January 2010, the FDA granted orphan drug designation status for HETLIOZ in Non-24 in blind individuals. The FDA grants orphan drug designation to drugs that may provide significant therapeutic advantage over existing treatments and target conditions affecting 200,000 or fewer U.S. patients per year. Orphan drug designation provides potential financial and regulatory incentives, including study design assistance, tax credits, waiver of FDA user fees, and up to seven years of market exclusivity upon marketing approval. In February 2011, the European Medicines Agency (EMA) designated HETLIOZ as an orphan medicinal product for the same indication.

Non-24 affects a majority of totally blind individuals, or approximately 80,000 people in the U.S. Blind individuals who develop Non-24 lack the light sensitivity necessary to synchronize the master body clock in the brain with the 24-hour day-night cycle. In sighted individuals, decreased exposure or sensitivity to light and social and physical activity cues may contribute to a free-running circadian rhythm. With the high frequency of mental disorders involving social isolation and cases of Non-24 developing after a change in sleep habits, behavioral factors in combination with physiological tendency may precipitate and perpetuate this disorder in sighted individuals. Hospitalized individuals with neurological and psychiatric disorders can become insensitive to social cues, predisposing them to the development of Non-24.

Most people have a master body clock that naturally runs longer than 24-hours and light is the primary environmental cue that resets it to 24 hours each day. Individuals with Non-24 have a master body clock that is not reset, and continually delays, resulting in prolonged periods of misalignment between their circadian rhythms and the 24-hour day-night cycle, including the timing of melatonin and cortisol secretion. As a result of this misalignment, Non-24 is associated with significant disruption of the sleep-wake cycle and impairments in social and occupational functioning, and marked subjective distress. Individuals with Non-24 cycle in-and out-of phase and suffer from disrupted nighttime sleep patterns and/or excessive daytime sleepiness.

While there are no FDA or EC approved treatments for Non-24 other than HETLIOZ, there are a number of drugs approved and prescribed for patients with sleep disorders. The most commonly prescribed drugs are hypnotics. 

Fanapt  

Fanapt® is a product for the treatment of schizophrenia. In May 2009, the FDA granted U.S. marketing approval of Fanapt for the acute treatment of schizophrenia in adults. In October 2009, the Company entered into an amended and restated sublicense agreement with Novartis. They had originally entered into a sublicense agreement with Novartis in June 2004 pursuant to which we obtained certain worldwide exclusive licenses from Novartis relating to Fanapt. Pursuant to the amended and restated sublicense agreement, Novartis had exclusive commercialization rights to all formulations of Fanapt in the U.S. and Canada. In January 2010, Novartis launched Fanapt in the U.S. On December 31, 2014, Novartis transferred all the U.S. and Canadian commercial rights to the Fanapt franchise to Vanda as part of a settlement agreement. In June 2015, Vanda announced positive results from REPRIEVE, a Phase III long-term maintenance study that was conducted by Novartis. In May 2016, the FDA approved a sNDA for Fanapt for the maintenance treatment of schizophrenia in adults.

​In July 2017, the EMA’s Committee for Medicinal Products for Human Use (CHMP) issued a negative opinion recommending against approval of Fanaptum (oral iloperidone tablets) for the treatment of schizophrenia in adult patients in the E.U. The CHMP was of the opinion that the benefits of Fanaptum did not outweigh its risks and recommended against marketing authorization. The negative opinion was upheld upon appeal in November 2017. 

Pursuant to a settlement agreement with Novartis, the Company reacquired the U.S. and Canadian rights to the long-acting injectable (depot) formulation of Fanapt and are evaluating the commercial opportunity around the depot formulation. 

Tradipitant (VLY-686)

Tradipitant is a small molecule NK-1R antagonist that the Company licensed from Eli Lilly and Company (Lilly) in April 2012. NK-1R antagonists have been evaluated in a number of indications including chemotherapy-induced nausea and vomiting, post-operative nausea and vomiting, gastroparesis, alcohol dependence, anxiety, depression and chronic pruritus associated with atopic dermatitis.

Vanda commenced a Phase II clinical study of tradipitant in the treatment of chronic pruritus in patients with atopic dermatitis in 2014. Results from this study, which were announced in March 2015, showed no significant difference from placebo on the pre-specified primary endpoint. Vanda believes this proof of concept study was informative, in that through subsequent analyses, it revealed statistically significant and clinically meaningful responses across multiple outcomes evaluated in individuals with higher blood plasma levels of tradipitant at the time of their pruritus assessments. Vanda initiated a placebo controlled pruritus proof of concept study in the second quarter of 2016. Results from this study, which were announced in September 2017, showed significant improvements in itch and disease severity. These results were presented at the 9th World Congress of Itch in October 2017. 

Vanda initiated a placebo controlled Phase II clinical study of tradipitant in the treatment of gastroparesis in the fourth quarter of 2016.

VTR-297

VTR-297 is a small molecule HDAC inhibitor with potential use as a treatment for several oncology indications. The FDA accepted an Investigational New Drug (IND) application for VTR-297 in 2017 and provided authorization to proceed with the treatment of patients with relapsed and/or refractory hematologic malignancies.

VQW-765


VQW-765 is a Phase II alpha-7 nicotinic acetylcholine receptor partial agonist that the Company licensed from Novartis on December 31, 2014 pursuant to a settlement agreement. Vanda is now evaluating potential indications, including cognitive impairment. 

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​My Analysis

Vanda Pharmaceuticals is one of those rare small Biotechnology companies that actually has products approved by the FDA and currently selling and bringing earnings into the company. Just that fact is noteworthy in itself. But in addition to that, the Company has three other products in the pipeline of which one of those products is in Phase 3 testing. While that doesn't guarantee it'll make it to the shelves of your local Walgreens, it does mean it made thru the first tow phases with success. And that's a good sign. 

So with $165M in sales, $180M to $200M in sales next year, and an expected EPS growth rate of 15% over the next few years, I believe this is a company that needs to be in my portfolio. These shares also have options associated with them so there's ways to accumulate these shares rather than simply buying them on the open market. There's also ways to make money in the options market once the shares are acquired. 

But note that these shares have moved up quite a bit over the last couple of months. Personally I'd like to buy these shares below $19 per share but there's no guarantee they'll pullback that far before they continue to move higher. With a little luck and a little patience, I believe I can be an owner of a few of these shares. 


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Buy Highs, Sell Higher Highs

3/11/2018

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The price you pay for a stock is never as important as the direction the stock will take after you buy it. That may be obvious to experienced investors but beginners don’t always understand this basic concept. The’ve been indoctrinated with the idea of buying low. That’s why they’re often drawn to shares that are falling. 

Inertia has a place in investing. Things that go up tend to continue to go up. Don’t believe me? It’s called trend investing, and a lot of successful investors invest this way. Some investors are smart enough to find companies as they start their upward trend. Others look for an established trend and then hop on board for the ride. 

Most people want to be the first type of investor. They want to find the trend as it begins. But that’s hard, and I’m just not that smart. Others, like myself, use momentum indicators to find trends as they’re getting established and simply join in on the fun. But even those that are less knowledgeable of the markets, charts and indicators, can easily screen for companies hitting New Highs. 

Obviously the later an investor joins in on a trend, the more dangerous it is simply because the trend is probably in the later stages of development. But that doesn’t mean it’s over. It just means that there may not be a lot of time left before it reverses. That’s where close monitoring becomes critical. 

I screen for New Highs because they make for short term swing trades. If I’m nimble enough I can make a nice chunk of change in a very short time. If anyone attempts to use this strategy, one of the keys to keep in mind is volume. Volume always confirms trend so stocks that enter New High territory should also be accompanied by increasing volume. If that’s not happening, the trend is probably coming to an end. Reversal may be coming soon. 

Here’s some nice advice from Investopedia:

Consider these reasons for buying relatively expensive stocks:

    •    You are buying a stock that is trending upward, not downward. You are not hoping or waiting on a turnaround story or a buyout. Chances are, your stock has proved its value before you buy it.
    •    A stock at or near its high is working with Wall Street money instead of fighting it. And, institutional money moves stocks. Unfortunately, retail buying and selling are not significant market events. Aligning your investments with money managers who manage billions of dollars may reduce the risk that you'll lose a lot of your own money.
    •    Cheap stocks tend to trade less frequently. If you own a stock that trades lightly, chances are you may have difficulty finding a lot of buyers at your desired price(s). Stocks that lack volume also lack institutional support. And, as stated above, it's the institutional money that determines stock prices on Wall Street.
    •    Making any investment decision solely based on one indicator is not a good strategy. As you find these uptrending stocks in leading industries, one strategy may be to wait for a minor correction of 8-12% before pulling the trigger. This will mitigate the risk of "buying at the top" and therefore provide some cushion for any potential losses that you may incur.


If you're interested in looking for New Highs to consider, there's plenty of places to view New High lists. Most newspapers carry them and there's numerous websites that list stocks hitting new highs. I keep my own list and include them in weekly articles I publish on this sight under the drop down "New Highs". You can also link to it here. I don't include all companies that hitting new highs, only the ones that meet the following criteria I'm interested in.

The list includes those companies hitting new highs, have more than 25% estimated earnings growth over the next year and the next 5 years, have a positive forward P/E ratio, and a current ratio greater than one. I've found that companies that fit this description are very appealing to investors looking to increase the value of their portfolios.

While high earnings estimates can go undetected for extended periods of time, once they're recognized by investors it's generally the reason traders continue to push these shares into even higher territory. This often occurs for an extended period creating opportunities for swing traders.

If you'd like to see this list on a more frequent basis, you can view the list by clicking on this link. It's the source of my information. (
Source)
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0 Comments

Retirement is a Waste of Time

3/6/2018

2 Comments

 
Some of the most popular articles on the net these days are articles on how to retire at 50, 40 or even as young as 30. The idea is that as soon as an investor can accumulate the minimum amount of income (usually in the form of dividends) to support a minimal lifestyle, he should drop out and live a self centered, self absorbed life of laziness and consumption.  Basically the life of a bum. 

​When I see these articles I wonder who in the world were they written for and just who would really want to live a meaningless life of sitting on park benches for hours at a time in the middle of the day? But then perhaps I just don't understand or appreciate what this idea of retirement means to this younger generation. If retirement to this next generation means leaving behind that creative and productive part of my life for a life of self-centeredness, massive consumption, and laziness, then this younger generation doesn't understand the concept of retirement. 


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​As a member of the Baby Boom generation I couldn't wait to turn 16 so I could apply for and obtain a good paying job. It was all part of that process of growing up and it was the means by which I got those things in life that my parents wouldn't or couldn't buy for me. A "real" job meant the end of mowing grass and shoveling snow for other people for money. It meant I was growing up and entering into the adult world. It meant I was beginning to make something out of my life and hopefully the beginning of a wealthy life. And most of all it was liberating.

Attending undergraduate and graduate schools were the next steps in the building process. It was the stepping stone to a career and to obtaining my goal of a lifetime of employment. It was suppose to be the realization of an academic dream to put meaning into my life. With that Master's Degree in hand I found that career I had longed for and I immediately began that lifelong journey of building a life of accomplishments and fulfillment. This wasn't something that happened overnight and it wasn't something I was willing to jeopardize or abandon. That career became the basis by which I built a life. A life and career that became so inseparable that they became one and the same. I built a life and changed from a kid that simply consumes to an adult that builds and creates. My career was something I studied for in college, it's something I was trained to do, and over the years it's become interwoven and critical to my entire life. 

I didn't create this life simply to give up on it half way through. My plan was never to do the minimum and stop. My plan was never to give up just as I hit my stride simply because it was possible. The purpose has always been the building and the creating. To do anything other than what I have done would be to abandon my inner drive. Maybe this is just the result of my middle class background or my midwest personality. Maybe it's simply the way my parent's imprinted their values on me when I was young. Regardless, it's who I am. And at this point in my life the things that retirees do simply do not interest me. Maybe someday they will but it'll be years from now when I'm very, very old.
"The trouble with retirement is that you never get a day off."
-- Abe Lemons, College Basketball Player and Coach
Now, even in my 60s, I'm still unwilling to give up that desire and willingness to build and create. Retirement to me means an end to the creative and productive part of my life and a return to the consumerism and consumption of my youth. It seems like such a waste of life's God given talents to simply stop contributing and live a life that's carefree and meaningless when I'm physically able to still do so much more. I just don't see retiring. Ever. 

When this current career is over I'll surely find another career. And then another and another, if necessary. It's the work that makes up your life that gives meaning and purpose to your life. And all the dividends in the world can never do that for you. 

Those dividends may be able to provide me the financial freedom, independence and security that's necessary to pursue my dreams and goals but they'll never be the goals themselves. It's all about work, careers, trading and investing. It's never been about the money. It's always been about living a meaningful and positive life.


2 Comments

Profire Energy

3/1/2018

0 Comments

 
Profire Energy, an oilfield technology company, provides burner- and chemical-management products and services for the oil and gas industry primarily in the United States and Canadian markets. It assists energy production companies in the production and transportation of oil and natural gas. The company offers burner-management systems to ignite, monitor, and manage the burner flames used in oilfield vessels, as well as complementary oilfield products, such as valves and fuel trains, airplates, solar packages, and flare stack igniter and nozzles. It also provides chemical-management systems to monitor and manage chemical-injection process to ensure that optimal levels of chemicals are injected. Profire Energy, Inc. also sells and installs its systems in France, Italy, Ukraine, India, Nigeria, the Middle East, Australia, and Brazil. The company is headquartered in Lindon, Utah.
(Summary) (Company) (Chart)
25 February 2018
Price $2.16
1yr Target $2.60
Analysts 3
Dividend $0.00
Payout Ratio 0.00%

1yr Cap Gain 20.37%
Yield 0.00%
1yr Tot Return 20.37%

P/E 29.19
PEG 1.39
Beta 1.88


EPS (ttm) $0.07
EPS next yr $0.11
Forward P/E 19.12
EPS next 5yr 21.00%
1yr Price Support $2.31

Market Cap $100.89 Mil
Revenues $34.40 Mil
Earnings $3.70 Mil
Profit Margin 10.75%

Quick Ratio 8.50
Current Ratio 11.20
Debt/Equity 0.00


1yr RevGR 44.60%
3yr RevGR 46.99%
5yr RevGR 53.98%

1yr EarnGR -8.34%
3yr EarnGR 16.08%
5yr EarnGR 29.67%

1yr DivGR ---
3yr DivGR ---
5yr DivGR ---

ROA 8.40%
ROE 8.90%



​Overview


Profile Energy is an oilfield technology company, providing products that enhance the efficiency, safety, and compliance of the oil and gas industry. The Company specializes in the creation of burner-management systems used on a variety of oilfield natural-draft fire tube vessels. They sell their products and services primarily throughout North America. Their experienced team of industry service professionals also provides supporting services for these products. Profile Energy was originally incorporated on May 5, 2003 and since October 2008, they have been primarily engaged in the business of developing burner-management technologies for the oil and gas industry.

Principal Products and Services

In the oil and natural gas industry, there are numerous demands for heat generation and control. Oilfield vessels of all kinds, including line-heaters, dehydrators, separators, treaters, amine reboilers, and free-water knockout systems require heat to satisfy their various functions, which is provided by a burner flame inside the vessel. This burner flame is integral to the operation of the vessel because these vessels use the flame's heat to facilitate the proper function of the vessel. Such functions include separating, storing, transporting and purifying oil and gas (or even water). For example, the viscosity of oil and moisture content (and temperature) of gas are critical to a number of oilfield processes, and are directly affected by the heat provided by the burner flame inside the vessel. Profile Energy's burner-management systems help ignite, monitor, and manage this burner flame, reducing the need for employee interaction with the burner, such as for the purposes of re-ignition or temperature monitoring.

As a result, oil and gas producers can achieve increased safety, greater operational efficiencies, and improved compliance with industry regulations. The Company believes there is a growing trend in the oil and gas industry toward enhanced control, process automation, and data logging, partly for potential regulatory-satisfaction purposes. They also believe that enhanced burner-management products and services can help their customers be compliant with such regulatory requirements, where applicable. In addition to selling products, the Company trains and dispatches service technicians to service burner flame installations in Canada and throughout the United States.

Profire Energy initially developed their first burner-management system in 2005. Since 2005, they have released several iterations of the initial burner-management system, increasing features and capabilities, while maintaining compliance with Canadian Standards Association (CSA) and Underwriters Laboratories (UL) ratings. 

The Company's burner-management systems have become widely used in Western Canada, and throughout many regions in the United States. They've sold their burner-management systems to many large energy companies, including Anadarko, Chesapeake Energy, ConocoPhillips, Devon Energy, Encana, Exxon-Mobil, Petro-Canada, Shell and others. Their systems have also been sold or installed in other parts of the world, including France, Italy, Ukraine, India, Nigeria, the Middle East, Australia, and Brazil. While they have an interest in expanding international distribution capabilities, their current principal focus is on the North American oil and gas market.

Recent Product Extension: PF3100

In September 2015, the Company unveiled its next generation burner-management system which is designed to operate, monitor, and control more complex, multi-faceted oilfield applications. The PF3100 is an advanced management system designed to work with a number of Profire-engineered modules, specific to different applications, thus allowing the system to expertly manage a wide variety of applications.

Throughout the industry, Programmable Logic Controllers (PLCs) are used to operate and manage custom-built oilfield applications. Though capable, PLCs can be expensive, tedious, and difficult to use. The Company's unique solution, the PF3100, can help manage and synchronize custom applications, helping oilfield producers meet deadlines and improve profitability through an off-the-shelf solution with dynamic customization. The Company is selling the PF3100 for initial use in the oil and gas industry's natural-draft market, and has begun engaging with customers regarding forced-air module application within the oil and gas industry.  

Additional Complementary Products

In addition to the Company's burner-management systems, they also sell complementary oilfield products to help facilitate improved oilfield safety and efficiency. Such products help manage fuel flow (e.g., valves and fuel-trains), meter air flow (e.g., airplates), generate power on-site (e.g., solar packages), ignite and direct flame (e.g., flare stack igniter and nozzles), and other necessary functions. They continue to develop innovative complementary products, which they anticipate will help bolster continued long-term growth. Some of the complementary products they sell are purchased from third parties (e.g., solar packages), while some are proprietary (e.g., flare stack igniter) or patent-pending (e.g., inline pilot and valve technologies).

Chemical-Management Systems

In addition to the burner-management systems and complementary technologies Profire Energy has historically sold, they extended their product line by acquiring the assets of VIM Injection Management ("VIM") in November 2014, which extended the product offering to include chemical-management systems.

Chemical injection is used for a wide variety of purposes in the oil and gas industry including down-hole inhibition of wax, hydrates, and corrosion agents, so that product can flow more efficiently to the wellhead. Once at the wellhead, chemical injection can also be used to further process the oil or gas before it is sent into a pipeline, and with other applications. 

Currently, a variety of pumps are used to meter the chemicals injected, but are often inaccurate in injecting the proper amount of chemical, as they may not account for all of the variables that affect how much chemical should be injected (e.g., pressure, hydrogen sulfide concentration, etc.) nor the optimal efficiency rates of varying pump systems.

Inaccurate injection levels are problematic because the chemicals injected are expensive, and over-injection causes unnecessary expense for producers. Under-injection can also be problematic because it often results in the creation of poor product (i.e., with wax, hydrate, or corrosion agents) and causes problems with pipeline audits.

Profire Energy's chemical-management systems monitor and manage the chemical-injection process to ensure that optimal levels of chemicals are injected. This improves the efficiency of the pump and production quality of the well, improves safety for workers by reducing the risk of exposure to these chemicals, and improves compliance with pipeline regulations. Like their burner-management systems, the chemical-management systems can be monitored and managed remotely via SCADA or other remote-communication systems. Profire Energy holds a U.S. patent related to their chemical management system and its process for supplying a chemical agent to a process fluid. Other international patents are pending. 


My Path Forward

I started a position last week in these shares based on the fundamentals above and the company's stock chart. The shares are definitely moving higher as the company's fundamentals continue to improve. But this is a very small company with a specific market. And while they're currently trying to broaden their market by looking into the agriculture sector for additional future growth, there's no guarantee any of that will happen. But despite that, I believe this is a great company with a great product in an industry that's coming back strong. 

I intend to monitor this company closely with the intent of accumulating additional shares as they move higher. I think this company has a great future and I'd like to be part of it. 

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    I am an Individual Investor with specific interest in long term growth and then enhancing my returns with income from dividends and derivatives. I don't recommend stocks to anyone (it's a good way to lose friends) and no one reading this should misinterpret my blog as a recommendation for any type of investment. I am writing this solely for myself and my kids.


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