Michael Smedley Knight Therapeutics GUD-T RISKY Aug 06, 2014

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. Trades at a cheap valuation. Investors’ patience has run out. Recent acquisition gave it a new life. Current environment can be favorable. Unlock Premium - Try 5i Free

Years ago, they bought a major company that he owned a lot of shares in. He's waiting for another such purchase by GUD before considering it. He's looking for companies with growth and earnings.

The stock is acting better, and is up 15% YTD. It has been a while since it saw $6. EPS was -4c vs expectations of (nil). Revenue was $86.6M, beating estimates of $83.1M. EBITDA of $13.58M missed estimates of this $14.47M. Guidance was largely maintained. Revenue rose 4.9%, with margins a bit higher than estimates. Net cash is about $90M. Still not much excitement here. Some recent partnerships look more interesting than the quarterly results. It is good to see the sales gain, but we would not yet call this a dramatic turn. 
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A hidden gem. Low liquidity, but has good topline growth, strong margin expansion potential and the CEO has a great track record from Paladin Labs. It buys existing drug platforms, and can now leverage that platform to introduce new drug therapies. Huge net cash and keep buying back shares. 

(Note the short timeframe.)
One of the cheapest small caps, accumulate on weakness. Pullback gives you the opportunity. Good job setting stage for margin improvement over time, not overnight. High net-cash position. Capital discipline, good insider ownership. 

Solid hold over the longer term, need patience. Accumulate on any pullback. Volatility of Latin American markets is not helping, so watch that. Understands how to monetize recent acquisition.

Numbers are OK, but not fantastic. Better names in the sector. Lot of respect for management. May not be able to recapture the glory days of buying rights to distribute older drugs.