I like this deal and this company.
First, the deal:
H&Q as lead is good. They are a respected name in health and bio. Although they have only banked 17 deals so far this year, and have had a few stinkers (ASAT, CSAV, ETIN, LCOR, and NGTC), they have a nice bio winner with PDGM (up 146%), pulled off CWLD (up 129%, although it was a deal few believed would ever come), and recently have a true hottie under their belt with SRTI (up 227% in 5 sessions).
Next, the company:
Selling picks and axes to the gene miners is good. And they have sold a lot: $23 million worth in 1999.
Consider this: that figure is almost 6 times LMNX's trailing twelve month (TTM) sales, 6 times CPHD's TTM sales, and over 4X ORCH's.
At $24 TBIO is selling at a mere 26X TTM sales. LMNX sells at 323X, CPHD 118X, and ORCH 280X. Put the average of those multiples on TBIO and you have a $5.5B market cap and a $319 stock price. That is not a prediction, just a simple relative valuation analysis to illustrate that there is LOTS of upside.
One last thing: Gotta love the tiny float. And total shares out are only 17.325M, almost 1/2 that of ORCH's. |
