I sure hope nobody buys this company up because this stock has been depressed and undervalued for so long that ASTRA-MERCK would most likely get it way too cheaply, the market cap at todays 1 5/8 is only about $18 Mil or so. CMTR seems like they are right on the cusp of having a decent revenue stream with still more good products in the pipeline (gee, maybe they can even get - dare I say it - profitable in the near term). They have a better chance of near term profits than most bio's who will be still trying to get through the FDA for the next decade, partly because they are so used to running so lean on survival mode - this is not a company that throws alot of cash around. I'd much rather see it stand alone with the prospects of being a 10 bagger or more than getting a 2x or so at a merger and having all of its future value lost in the monster that ASTRA-MERCK is. Just because they are under-appreciated now doesn't mean it will always be so.
To give their infinitesimally small market cap some perspective, here's a recap of their valuation history:
The private years:
Aug. 88: $5 Mil
June 89: $12 Mil
Apr 90: $14 Mil
June 91: $24 Mil
Then the IPO:
Feb 92: $114 Mil (raised over $20 Mil in capital)
as far as I can tell, CMTR hasn't sold a significant block of shares since, and currently has about 11.1 Mil shares outstanding.
Oh by the way, let's dream, their 5 year share price high of $17.00 (in 92) would give them a Market Cap of $189 Mil.
Now some local perspective. The San Jose Mercury News prints a great financials table in each Sundays Business section (locals should definitely check it out weekly). It covers all of the local Bay Area public companies by sector. Well, the Biotechnology and Medical Products Section lists 83 companies. Of these 83, only 3 have lower valuations than CMTR. Of the 83, they can calculate profit/loss on 53 companies (they don't calculate for newly public companies and a few others for whatever reason). Only 16 of the 53 were profitable last year (profits are still a really rare thing in biotech!). The average Market Cap of the 16 profitable biotechs is $1582 Mil, (that's $1.5 billion) with an average PE of 35. CMTR lost $0.68 per share last year. Of the 36 others that lost money last year, 12 lost more per share than CMTR and 24 lost less per share than CMTR. The average Market Cap of the 12 who lost more per share is $230 Mil. The average Market Cap of the 24 who lost less per share is $222 Mil.
Obviously, the anemic revenue stream from CholesTrak has disappointed and disillusioned a lot of investors in the past - and rightly so. But, CMTR is at a turning point where they DEFINITELY WILL start to see some additional sources of revenues in the next couple of quarters with the H. pylori test and the ColoCare product - how much revenue is the $200 million dollar question (biotechs don't have $20 dollar questions, they are much too speculative for that as the above market cap averages show). Also, if cholesterol testing comes back in vogue (thanks for the nice article Eric) that wouldn't hurt either. Gee, they even have some products still in the pipeline too, such as the HIV test, theophylline test, etc. (maybe even worthy of some speculative market cap valuation increase).
Well, my point is - this dog has a good chance of maybe flying with the eagles again (and not as meat for the nestlings) and it could happen in the next year or so. I think I'll be hanging around to see how the mystery turns out.
On a different note: this is the only stock I've bought yet that Smith-Barney made me sign a non-solicitation acknowledgment stating that they didn't recommend it to me before they'd let me buy it (what a pain in the ass, I had to go in person because I don't have a fax). I turned those shares for a quick profit at 2 1/4 and bought back in again at 1 «. SB must be afraid that I'd make money on something they didn't like (or don't care enough about to understand). That gives you an idea of how the big guys view this company - so many investors have lost so much in the past (including my Mom who's in between $9 and $12 per share on my advice - ouch!) that they really just want to discourage you from being in it. But, given the near term revenue increases, I see it as a lot lower risk than the slew of biotechs who are still in clinicals (which statistically by the way, the majority of which will fail miserably). I'm now trading mostly with Lombard by the way, (where non-solicitation is the rule) but am keeping a small account with Smith-Barney so I can milk their full service features.
Piper, Piper, Piper you need to go relax for a while and quit watching the day to day, I'm a little guy and I've moved a 10,000 share block in and out in the past month, big deal, at these prices it's only peanuts to the big guys. Not everybody is as informed on this company as the readers of this thread are. With near term product and milestone revenues THERE IS NO WAY I BAIL NOW and I figure you'll be kicking yourself later.
Later, Dave W. |
