RE: VICL or any other "below cash" stocks
I'm trying to understand this philosophy of buying under "cash value".
For example, VICL, I show at 3/31 they had 14,723,000 in cash plus 84,582,000 in short term investments, ok so there they have 4.94 in cash per share, but they've got current liabilities that were most likely paid with that cash some time in the quarter (even possibly on 4/1), so I'd back out 10,745,000 or .53 of cash to 4.41 net cash per share.
Since VICL hasn't projected any income stream, I'd also have to assume a cash burn rate during the quarter as well, right? They've been burning between .55 and 1.44 per quarter during the last 5 quarters, so where's a good price?
I'm not just picking on VICL, I just don't understand the valuations of bio tech stocks that are not profitable and I'm not familiar with the "below cash" method of valuation.
Any comments?
Bob Park |
