MYX - Mayne Pharma Group

[JTLP]

Mayne is on the nose a fair bit recently, even with their statement around margins. Nearing 52 week lows, is the US pressure still there or something else?

 

[Klogg]

Mayne is on the nose a fair bit recently, even with their statement around margins. Nearing 52 week lows, is the US pressure still there or something else?

The entire pharma industry is on the nose at the moment. Concerns of 10%ish deflation in the generics space would crunch margins for some, including distributors.

 

[Klogg]

The entire pharma industry is on the nose at the moment. Concerns of 10%ish deflation in the generics space would crunch margins for some, including distributors.

Should also mention - just because they confirmed margins in the Teva portfolio, there's nothing stating that margins on other generics aren't getting crunched.

I still see this as cheap relative to future cash flows, but I could be wrong.

 

[peter2]

A chart from my reversal watch-list. Please, don't get too excited. The trends are all down and they're not going to change anytime soon. However the recent price action has been bullish. Someone has started to nibble at these low prices. For me price must stay above 1.00. If it goes below, then MYX goes into my dead-man-walking watch list.

 

[JTLP]

MYX got mentioned as a tax loss seller in the paper, and perhaps that was a reason for a bit of strength recently. I hold, but wouldn't expect too much once July hits tbh.

 

[galumay]

MYX got mentioned as a tax loss seller in the paper, and perhaps that was a reason for a bit of strength recently. I hold, but wouldn't expect too much once July hits tbh.

No doubt there are people who chose to crystallise losses for tax reasons with MYX, I bought in when they fell initially, and have topped up along the way. Long term I think it is a great business to be a shareholder in.

 

[VSntchr]

I don't know much about MYX, but there has been more rumblings out of the US with the health care bill and other regulatory pharma news which may be a factor

 

[galumay]

I certainly think that is driving some of the negative sentiment VSntchr, it doesnt concern me because I dont think it will have material impact on the bottom line in the medium to long term. I just see it as a buying opportunity.

 

[Klogg]

I certainly think that is driving some of the negative sentiment VSntchr, it doesnt concern me because I dont think it will have material impact on the bottom line in the medium to long term. I just see it as a buying opportunity.

It may have an impact - especially if the US decide they want to import generics.
Unlikely (given Trump is removing FTAs, not adding to them), but it's possible.

 

[VSntchr]

I certainly think that is driving some of the negative sentiment VSntchr, it doesnt concern me because I dont think it will have material impact on the bottom line in the medium to long term. I just see it as a buying opportunity.

Actually, I was referring to the recent reversal in sentiment potentially due to what this article refers to.

 

[JTLP]

Getting pretty hammered now. Perhaps the results aren't pretty with the generics margins?

 

[Quant]

Getting pretty hammered now. Perhaps the results aren't pretty with the generics margins?

Very skinny coverage brokerwise on this stock but earning revisions have been in a downtrend for 12 months now with revenue a little flatter so the margins cant be increasing on this basic metric . Do they have debt issues ??

Technically there are a couple key levels to watch coming up ( I know little about this stock fwiw ) It is one of the most heavily shorted stocks on ASX which may be concerning although a short squeeze sets up for a substantial medium term bounce . Report FY 25 August

 

[luutzu]

Very skinny coverage brokerwise on this stock but earning revisions have been in a downtrend for 12 months now with revenue a little flatter so the margins cant be increasing on this basic metric . Do they have debt issues ??

Technically there are a couple key levels to watch coming up ( I know little about this stock fwiw ) It is one of the most heavily shorted stocks on ASX which may be concerning although a short squeeze sets up for a substantial medium term bounce . Report FY 25 August

View attachment 71824 View attachment 71825

Just went through 7 years of its annual reports, though haven't taken into account the Teva/Allergran purchase post the FY16 report...

Seems like a crappy business. Run by empire builders on both debt and more shareholders cash which they borrowed and raised pretty much on a yearly basis. Producing some profit but nothing to write home about.

Maybe the latest acquisitions will prove to be game changers, that I don't know. But if history is any guide... not impressed.

Not saying this because the current share price seems to be hammered. There are good quality pharma, a generic one at that. I just don't see it in Mayne.

 

[Klogg]

Just went through 7 years of its annual reports, though haven't taken into account the Teva/Allergran purchase post the FY16 report...

Seems like a crappy business. Run by empire builders on both debt and more shareholders cash which they borrowed and raised pretty much on a yearly basis. Producing some profit but nothing to write home about.

They've tapped shareholders a lot. But a lot of that funding has come from directors, at prices that are favorable to shareholders (SPP discounts were significant)

Just out of curiousity, what makes you say they're empire builders?

 

[McLovin]

Seems like a crappy business. Run by empire builders on both debt and more shareholders cash which they borrowed and raised pretty much on a yearly basis. Producing some profit but nothing to write home about.

2010 EPS 2.6cps
2017 1h 5.2cps

If that's empire building, build on.

 

[Quant]

2010 EPS 2.6cps
2017 1h 5.2cps " 2017 EPS 10.0cps "

If that's empire building, build on.

Obviously large variations on forecasts out there on this given the pretty large fluctuations on earnings over 10 years , The mean forecast is a bit lower than your stated numbers but the spread low to high is significant >20% i'd say debt is a factor on discounted SP , if I held i'd try and find exact numbers and interest paid , over leveraged with a revenue hiccup and the stress levels rocket . damn spi open gotta go

 

[McLovin]

Obviously large variations on forecasts out there on this given the pretty large fluctuations on earnings over 10 years , The mean forecast is a bit lower than your stated numbers but the spread low to high is significant >20% i'd say debt is a factor on discounted SP , if I held i'd try and find exact numbers and interest paid , over leveraged with a revenue hiccup and the stress levels rocket . damn spi open gotta go View attachment 71827

I don't hold, and I was being lazy just more or less doubling 1h eps for the full year. The company underwent significant change starting in 2012. The balance sheet doesn't look stretched to me (you'd need to dig into those intangibles to play around with the amortisation and ask what if's around future write-downs and debt covenants given it basically represents the equity in the business). The price deflation in generics was well telegraphed, and their margins surprised to the upside even with 15% deflation. The spread in forecasts isn't surprising given the shorting activity on the stock. I have no real opinion on this stock other than they've done OK with their EPS growth.

I'm surprised how few brokers follow this. I have access to a fair amount of broker research and there just isn't that much on these guys.

 

[Klogg]

2010 EPS 2.6cps
2017 1h 5.2cps

If that's empire building, build on.

Agreed. But to be fair, on the surface it seems like empire building because of the acquisitions and cap raisings.

In reality, these guys are very opportunistic in their acquisitions. ~6 times EBITDA for the Teva generics, whilst Teva paid almost 17 times EBITDA for their purchase from Allergan.
It's also shown in their Fabior and Sorilux sales (SBD products). In under 6months of ownership, sales of Fabior have surpassed the peak whilst owned by GSK - and these are products with a 95%+ gross profit margin...

Their Metrics acquisition was also great. They bought it in 2012, and since it has been growing revenues at around 20% CAGR, with profits increasing in line (actually, a little better, but I don't have the figures in front of me).

I'll leave it there.

 

[McLovin]

It's also shown in their Fabior and Sorilux sales (SBD products). In under 6months of ownership, sales of Fabior have surpassed the peak whilst owned by GSK - and these are products with a 95%+ gross profit margin...

I saw that slide, pretty impressive.

 

[galumay]

Agree with most of the above, I reckon its great buying at current prices.