The Shares Researcher

Intro Roche is a more than 125-year-old pharmaceutical and diagnostics company with its head office in Switzerland. The majority of the bearer shares is still in the hands of the heirs of the company’s founder. That being said, there are also non-voting equity securities (NES) outstanding (see ticker symbol above). Both share classes are listed with the NES showing significantly higher trading volume.   Valuation Probably due to some disappointments in R&D, ceasing of Covid-related profits in the diagnostics segment and different capital structure due to purchase of Novartis’ stake in Roche in 2021, the price of the NSE has come down by around 30%. Let’s see if we can find some value in here after the price drop: Core EPS (excluding for instance some global restructuring plans, amortization and impairment of goodwill and intangibles) has been around CHF 20 per security, which translates into a Core P/E of around 14x, which seems not very demanding for a high-quality...

Last year, high-flying stocks decreased significantly while old, “boring”, cash flow generative businesses fared much better. Since starting this blog, the objective has always been to find cash generative companies with robust prospects available at a cheap valuation. Let’s look at some of the companies that have been mentioned on here: Fuchs Petrolub: Shortly after the initial mentioning of Fuchs on this blog, the company initiated a share buyback program and has been continuously buying back shares on the market. So far, the timing has been excellent – bravo, Fuchs! In October, the firm also reiterated its guidance and was able to pass through higher costs to a large degree. Altice USA: So far, this company has been the biggest losers since the initial mentioning of this stock on this blog. The elephant in the room is clearly the big debt load, followed by shrinking revenues. With a market cap of slightly above $2 billion, there is a lot of optionality in the company if things d...

Intro There is not much of an introduction needed for Warner Bros. since probably everybody is familiar with the name. Warner Bros. Discovery is an entertainment company which creates as well as distributes content on TV, film or streaming. The portfolio consists, amongst others, of Discovery Channel, CNN, HBO or Warner Bros. Pictures. Recently, however, there was a big change in the company: In 2021, Discovery acquired WarnerMedia from AT&T and combined Warner with Discovery. Former AT&T shareholders ended up with around 71% of the new Warner Bros. Discovery company. Since trading of the new Warner Bros. Discovery started in spring 2022, the stock price mainly knew one direction: down. As a result, in a bit less than a year, the stock lost around 60% of its value. One reason might be the lack of a dividend payment, which former AT&T shareholders may not appreciate and made them sell their shares.   Valuation Due to the merger, there is currently some uncert...

Intro Vopak stores oil, gas as well as chemicals and operates a global network of terminals worldwide. Its end markets are from the energy, manufacturing or food and agriculture sectors. The single biggest shareholder of Vopak is Hal Trust with 48.15%, a company also listed on Amsterdam’s stock market.    Valuation From 2017 to 2021, the lowest adjusted EPS achieved by Vopak was EUR 2.25 (high at EUR 2.80) demonstrating a very robust business model. At current prices, this translates into a P/E of below 10x, which doesn’t seem expensive. The company is paying a progressive dividend, which currently stands at EUR 1.25 per share, yielding 5.6%.   What’s next? After a more than 50% drop from spring 2020, it seems the shareholders that wanted to get out of Vopak are out to a large degree. The question is, what’s in the mind of the majority shareholder Hal Trust? If they still like Vopak, they might be inclined to make an offer for the entire company. Alternati...

Intro I have to warn you. Compared to almost all other companies mentioned on this blog, Agios is not generating any meaningful cash flow at the moment and, as you may have guessed, is in the “risky” biopharmaceutical business. Do I have any special knowledge in this sector? No. So why bother? Without going into any details in terms of their products or clinical pipeline which consists of programs in alpha- and beta-thalassemia or sickle cell disease where I certainly cannot add any value, I will try to focus on what I better understand: its financial position. At the end of 2020, Agios sold its oncology business for up to $2 billion plus royalties. The proceeds will and have been used to advance its pipeline and to buy back roughly $1.2 billion worth of its own shares.   Valuation At the end of March 2022, Agios had cash and marketable securities worth almost $1.2 billion and pretty much no financial liabilities. There are currently 71 million shares outstanding which ...

In June 2021, this blog mentioned the possibility to sell put options – for example the Jan23 2P @$0.18 per option (or 18$ per option contract) – on Gamestop as underlying. After a bit less than one year, the prices of the options above have come down significantly. Though the position could still be kept open, it seems prudent to close the trade early and buy back the options sold @$0.18 per option for only @$0.06 per option. This results in a profit of $0.12 per option for only delivering margin! Current Price Jan23 2P @$0.06 per option (or $6 per option contract)

Intro Fuchs Petrolub develops, produces and distributes lubricants and related specialties. The product program comprises more than 10,000 products and the company has more than 100,000 customers worldwide. Founded in 1931 as a family business in Germany, the company employs almost 6,000 employees in 50 countries today and is the world's largest provider among the independent lubricant manufacturers. Fuchs has two share classes: ordinary and preference shares. The preference share enjoys higher trading liquidity and some advantages regarding the dividend. The Fuchs family still owns 55% of the business through the ordinary shares with voting rights. In the following, we focus on the less liquid ordinary shares (yes, you got it, more bang for your buck!).   Valuation In 2021, Fuchs showed an increase of revenues of 21% to €2.9bn and a net profit of approx. €250m. Compared with the current market cap of around €3.6bn, the P/E stands at around 14x. Due to geopolitical tens...