Monthly Archives: December 2015

PD-Rx Pharmaceuticals reports terrible FY2015 results

Last year I wrote a blog post titled “PD-Rx Pharmaceuticals reports great FY2014 results“, but unfortunately, I can’t repeat that exercise this year. While it was likely that this year would be worse than the 2014 record year, 2015 was also worse than expected. Revenue dropped 33% from $29.1 million to $19.4 million while earnings dropped 72% from $2.0 million to $0.5 million. The company doesn’t go into a lot of details what’s the cause, except that they lost “significant sales in a single sector due to a loss of market demand for a single drug”. 

I think that this is a risk that you just have to accept when you invest in smaller companies. They are often less diversified with regards the products they offer and the number of customers they have. The biggest product of PD-Rx now represents 16% of sales, so they should now be a bit less risky (it was 49% in 2014!). Another factor that reduces the risk investors in PD-Rx face is the large cash balance that the company owns. PD-Rx currently has a $9.8 million market cap while they also have a net cash balance of $6.2 million. Because of the large cash balance, I think the stock is still pretty cheap at the moment (and on the edge of becoming a net/net once again), although it remains unclear what plans the company has with it. It has slowly been building up for years now.

I have compiled an updated table of PD-Rx’s financials below. As visible historical results have been volatile – but consistently positive – in the past. Since the company only releases results once a year we have to be patient to see if they can recover next year.

PD-Rx historical financials 2015 edition


Author is long PDRX

Mota-Engil Africa declares self-tender unconditional

In October I wrote about Mota-Engil Africa as a potential interesting special situation because the company had launched a tender offer for all shares outstanding while the stock continued to trade at a relative big 5% discount. Today the company declared the self-tender unconditional and that payment for the shares is expected to occur on or before 9 December. This translates to a pretty awesome IRR of more than 50% while I thought that the transaction would be near riskless. Of course, the fact that the deal was completed without problems doesn’t prove that this was the case, but it does make it a bit more probable that I was right :).


Still long MEAFR.AS