Australian (ASX) Stock Market Forum

SRX - Sirtex Medical

Jump to new
VSntchr said:
Another update today.
SRX cutting the fat out of the employee cost base and zoning their focus on SIRT.
$90m impairment post trial failures.

Dose sale growth of 5.5%, lower end of guidance. Underyling EBITDA also within recent guidance (65-74m) at $72m.
Market likes it with price ripping 13.6% at time of posting.
Click to expand...

I thought I'd trade a bit stronger but not 16%. To me it's a mixed update at best...
Good bits - dose sale not getting worse, EBITDA reaffirmed and at the higher end, lower cost going forward.
Bad bits - dose sale didn't recover and only hit the low end of a large range (5-11% guidance), no real clear growth path forward.

I had a trading position which I happily took profits on the spike... but it kept running a mile after I sold. D'oh.
 
skc said:
I thought I'd trade a bit stronger but not 16%. To me it's a mixed update at best...
Good bits - dose sale not getting worse, EBITDA reaffirmed and at the higher end, lower cost going forward.
Bad bits - dose sale didn't recover and only hit the low end of a large range (5-11% guidance), no real clear growth path forward.

I had a trading position which I happily took profits on the spike... but it kept running a mile after I sold. D'oh.
Click to expand...
Yeah agreed.
I thought maybe a 4-6% range but it went like a rocket and closed up 16%.
I think 'market darlings' such as srx (although not in recent times) seem to bounce back even off standard reports.

I got in at $11 and hopimg foe $18, hopefully some tech analysis will provide me insight as to the likelihood within the coming months?
 
Trading Halt pending a significant corporate transaction.

Takeover target or targeting someone else?

The Intelligent Investor blog made some good point about the new CEO dressing up SRX for a sale. What with gutting R&D and some 15% of the workforce; focus the company to its existing line of business.

Would be a shame to be taken over. Its numbers and potentials are very impressive.
 
Craft, I wish you were around to give your opinion. I held onto thru highs and lows. It will all end around May this year. My average is around $16.64 I think. I didn't buy that many stocks. At least I am in profit. Sorry that I can't provide any productive conversations about SRX. I was considering selling but instead I did nothing. I was wondering how the new CEO would compared to the old CEO. I wonder if $28 is a good deal??? Does anyone have an opinion?
 
That's one of the bumpier rides I've been on. Price looks very good for where the biz is post (failed) trials, Faramir.
 
Faramir said:
Craft, I wish you were around to give your opinion. I held onto thru highs and lows. It will all end around May this year. My average is around $16.64 I think. I didn't buy that many stocks. At least I am in profit. Sorry that I can't provide any productive conversations about SRX. I was considering selling but instead I did nothing. I was wondering how the new CEO would compared to the old CEO. I wonder if $28 is a good deal??? Does anyone have an opinion?
Click to expand...

$28 I think is a pretty decent price. You could probably, maybe, make a case that IF its expansion into Asia/China goes well, it could be worth $30 to $40 in 5 to 10 years - assuming no new discovery and moderate growth from the latest trials into potential use in right-sided colon or whatever it was.

But as things are with SRX, $28 is a fair bit higher than I would like to pay for it so it's nice to get lucky some time.

Don't know much about the two CEOs. Though Wong might have been a more visionary of the two CEOs. His funding of R&Ds suggests he want to grow SRX into a large independent pharma while the current one, and this is definitely hindsight and that II article speaking, seem to be dressing SRX up for a sale into the current global M&A binge big pharma is on.

So I guess who's better depends on what you prefer as shareholders. Lots of money now or potential lots of money later and being your own man.
 
I bought in again at the profit upgrade announcement in mid January. Lucky.
They will make more money as part of big Pharma. it's an important lesson that relates to Mesoblast and StarPharma also. Once the technology is mature, the company will be taken over and looking at what they can make as a small company should be doubled once they become part of a powerful big pharma company.
 
This might sound dumb - I am at a lost of what to do next??? A bit over 66.6% profit. If they paid me today, it would just sit in my account as I do not know what to do next. I think I might at least wait for the dividend. It should be due out soon. Gee, I need to find time to study SRX more even though it will be unlisted later this year. Very limited chance of a second suitor making a higher - actually: no chance. I could sell now, pay brokerage and get less than (even though close to) $28. Or wait, get the dividend and pay no brokerage. I don't think there will much action for the next few months. I can't see the take over being voted down.

When the price started to rise prior to any news coming, I felt something nice was going to happen. I felt relief.

Once I suffered from FOMO. Now it's FODSD - Fear Of Doing Something Dumb. I just do nothing. By luck and not by judgement, decision making, etc that SRX worked out for me. No wonder I forgot to top up on SPL or CCP 4-5 months ago. Last time I experienced a take over was Veda (VED). I made a profit with that but I purchased a very small position because I was nervous about my decision to buy. That was 3 1/2 years ago.

(PS: No need for advice. It is something I need to work out myself. I know the answer/s seem obvious to all of you.)
 
Faramir said:
I know the answer/s seem obvious to all of you.
Click to expand...

@Faramir, dont sell yourself short - or over estimate the rest of us! We all struggle with decisions like this, its the nature of investing and all you can do is try to improve your mental models and get better at ddecision making. Its a constant journey and anyone that thinks they know enough to stop learning will get an unpleasant surprise!
 
Faramir said:
This might sound dumb - I am at a lost of what to do next??? A bit over 66.6% profit. If they paid me today, it would just sit in my account as I do not know what to do next. I think I might at least wait for the dividend. It should be due out soon. Gee, I need to find time to study SRX more even though it will be unlisted later this year. Very limited chance of a second suitor making a higher - actually: no chance. I could sell now, pay brokerage and get less than (even though close to) $28. Or wait, get the dividend and pay no brokerage. I don't think there will much action for the next few months. I can't see the take over being voted down.

When the price started to rise prior to any news coming, I felt something nice was going to happen. I felt relief.

Once I suffered from FOMO. Now it's FODSD - Fear Of Doing Something Dumb. I just do nothing. By luck and not by judgement, decision making, etc that SRX worked out for me. No wonder I forgot to top up on SPL or CCP 4-5 months ago. Last time I experienced a take over was Veda (VED). I made a profit with that but I purchased a very small position because I was nervous about my decision to buy. That was 3 1/2 years ago.

(PS: No need for advice. It is something I need to work out myself. I know the answer/s seem obvious to all of you.)
Click to expand...

I remember looking up their dividend before. They only pay it once a year, around Sept? So unlikely we'll get any before/if the takeover goes through. Haven't read the proposal but scanned through the summary and didn't mention any dividend, special and such, there either.

Unless I miss something that is. Is there a coming dividend?

-----------------

As to making decisions and not sure if it was luck or your own work... It's often both I reckon.

We can always work harder to increase the results from hardwork rather than relying on luck more than not... but Fortune always play a role.

But to not sell myself too short, SRX was one of those companies we should know is a quality business. Have an idea as to its value... and the luck bit is whether or not we're lucky enough to have studied it, had it on our radar when the price dropped to the $10s to $16s, preferably around the $12s if luck... and have the cash on hand to load it up.


Some charts showing metrics that you'll find in all quality businesses.

srx CE RE.png


Note the rising Green, the stable Black, the increasing Purple... the higher operating cash than reported profit with rising trend.

That's quality.

SRX cashconversion.png


Out of this world Cash Conversion.
Inventory flying off the shelves; Credit policy are tight and get tighter with the years. Payables are laxed... i.e. suppliers are either happy with SRX's business or aren't paying attention, or both.


srx netcash.png


All Cash flowing the right way.

All quality businesses show this... at least more often than not. Some might have one or two year that's a bit off, but often it's just like above.

srx ROE.png


The old ROE measure.


So why we can't predict corporate actions, the result of lawsuits or medical trials... Businesses of this quality, with zero debt, selling at very reasonable prices... back the truck up and chances are it should end up alright.
 
Trading Halt

Counter Offer!
https://www.asx.com.au/asxpdf/20180504/pdf/43tsrfb0d53jxs.pdf

$33.60 is a better than $28. Will Varian counter this new offer?

This morning I felt remorseful for not selling for during the past 2 months. Then a Trading Halt. Now FODSD has helped me again.

Please start trading again. I guess I have to wait until Tuesday

@craft where are you??? Do you have any opinions?
 
-------------
Australia's Sirtex gets $1.4 billion takeover offer from China's CDH Investments

https://www.reuters.com/article/us-...fer-from-chinas-cdh-investments-idUSKBN1I50BR

(Reuters) - Australia’s Sirtex Medical (SRX.AX) said on Friday China’s CDH Investments has made an offer to buy all shares of the company for A$1.87 billion ($1.41 billion), or A$33.6 per share, in cash.

Sirtex said in statement that an acquisition by CDH would be conditional to the approval of Australia’s Foreign Investment Review Board.

The Australian company, which had earlier received an offer from U.S. company Varian Medical Systems (VAR.N) for A$28.0 per share, said the directors continue to unanimously support and recommend the Varian offer.

------------------

Can the board really recommend a lower priced offer? Seriously?

If Foreign Investment Review Board would accept an offer from a US company, a Chinese one would be different?
 
Talk about last minute offer though. Not sure whether to sell or wait. Probably should wait as bidding war might occur.
 
Hard for the board to reject this offer.

With the Chinese telling our dear leaders to take their rosy, star spangled glasses off and smell the Yum Cha nearby, I'm guessing the FIRBs can't say yes to Varian but reject the Chinese on national interest grounds.


https://www.reuters.com/article/us-...inese-bid-for-australias-sirtex-idUSKCN1IN0XS
Varian says will not match Chinese bid for Australia's Sirtex
(Reuters) - Varian Medical Systems (VAR.N) said it would not increase its offer to buy Australian liver cancer treatment provider Sirtex Medical Ltd (SRX.AX) after Sirtex on Tuesday said Chinese private equity firm CDH Investments had submitted a formal bid.

CDH Investments this month made a last-minute offer of $1.4 billion, or A$33.60 per share, for Sirtex Medical, topping Varian Medical Systems’ proposal days before the U.S. firm was set to seal a takeover deal.


Varian continues to believe that its offer is superior to the CDH bid, the company said in a statement.

 
luutzu said:
Hard for the board to reject this offer.

With the Chinese telling our dear leaders to take their rosy, star spangled glasses off and smell the Yum Cha nearby, I'm guessing the FIRBs can't say yes to Varian but reject the Chinese on national interest grounds.


https://www.reuters.com/article/us-...inese-bid-for-australias-sirtex-idUSKCN1IN0XS
Varian says will not match Chinese bid for Australia's Sirtex
(Reuters) - Varian Medical Systems (VAR.N) said it would not increase its offer to buy Australian liver cancer treatment provider Sirtex Medical Ltd (SRX.AX) after Sirtex on Tuesday said Chinese private equity firm CDH Investments had submitted a formal bid.

CDH Investments this month made a last-minute offer of $1.4 billion, or A$33.60 per share, for Sirtex Medical, topping Varian Medical Systems’ proposal days before the U.S. firm was set to seal a takeover deal.


Varian continues to believe that its offer is superior to the CDH bid, the company said in a statement.
Click to expand...
Yes, we might not see the money till March next year, CDH bid is marginal for that reason, but hopefully we get a decent dividend (up to 30c allowed) to help with patience.
 
Knobby22 said:
Yes, we might not see the money till March next year, CDH bid is marginal for that reason, but hopefully we get a decent dividend (up to 30c allowed) to help with patience.
Click to expand...

How come next year? The FIRB and other admin stuff? I didn't read their proposal properly, just know that it's higher :D
 
luutzu said:
How come next year? The FIRB and other admin stuff? I didn't read their proposal properly, just know that it's higher :D
Click to expand...
According to Varian, the offer might take that long because of all the hurdles and paperwork.
 

Similar threads

System
IL1 - Ilala Metals
Replies
2
Views
1K
System
System
Dona Ferentes
The role of Private Equity
Replies
4
Views
1K
qldfrog
qldfrog
Fiona96
ATO Tax!
Replies
18
Views
2K
Ibza
Ibza
A
Long term plan to invest in a few ETFs
Replies
13
Views
2K
Value Collector
Value Collector
T
ICT Network Groups
Replies
0
Views
749
TRH
T
Top