Knight Therapeutics (GUD.TO)

(A Top Pick Dec 14/16. Down 19%.) Jonathan Goodman is a man of great patience and enormous wealth, which he got out of his first company. You have to be patient with this.

He really likes this company, but is beginning to think he might be in the minority. Over 5 years, it is up over 100%. Has done well for longer-term investors. About 65% of their market cap is in cash, so there is some downside protection. Management has been doing a good job in investing money. You have to be patient. It’s going to take time for them to deploy all the cash they have.

(A Top Pick Dec 14/16. Down 14%.) Just sold this a few days ago. Doesn’t think there is anything wrong with it. It’s Jonathan Goodman, who is an expert in what he does. He has to acquire more products to make the company bigger, and will probably achieve that. Still a Hold.

This is a bet on Jonathan Goodman, who is probably the smartest guy when it comes to doing what he is doing. This is not a trade, it is a long-term play and you are betting on his ability to get things done.

You have to look at it as a very long term investment. They are sitting on a war chest of cash and invest in many healthcare-related businesses. Management is very smart and know what they are doing, but to move the needle they have to make a huge acquisition.

There is tremendous competence on the part of Jonathan Goodman. You have to be patient with this to get the same return that you got from his previous Paladin Labs company. He is very good with his skills, connections and financing ability for future products that come his way. Unusual investments in funds that are in the pipes of products he is interested in.

A company that he quite likes. There are 2 key things. 1.) You have to be patient as about 50% of their market cap is in cash, and the company is going to take their time to spend that. 2.) You need to trust that management can build the company up and sell it for a good profit. It is probably a 3-5 year timeframe that is needed.

Everyone keeps watching for the big deal to happen. A lot of the smaller deals make money in a year or two. Management is waiting for a really big deal to come along.

Investors are selling this because they are bored and nothing is happening. The company is sitting on $750 million of cash and has a great management team that owns 23% of the company. They know exactly what they are doing. The stock is only up 22% in the last year, and he thinks boredom is a very bad reason to sell. Someday you are going to wake up and this company will have done an acquisition, and their growth rate is going to accelerate. He gets a lot of questions on this company. (Analysts’ price target is $10.88.)

Something as a long-term hold in healthcare? An ideal stock for the long-term, probably would be Knight Therapeutics run by Jonathan Goodman, who ran Paladin, which was eventually sold at $140 after 19 years. A very deeply experienced man. The stock has held in well, but hasn’t done anything particularly aggressive for some time.

This is more of a cash shell, but also has some products. Excellent management team. One thing; this trades above cash, and he likes to trade at a discount to cash.

A pharmaceutical company run by Johnson Goodman, who was also the cofounder of Paladin Labs, probably one of the best management teams you can find, and probably one of the best healthcare companies in Canada. Half their market cap is in cash, and they are either investing in the equity of companies, financing companies with debt at attractive interest rates, and/or investing in healthcare funds. These investments get their foot in the door, and then they can license out their products. Half their market cap is in cash, so half their value is doing nothing right now. You have to be patient. It may not do what you want in a year, but over a longer-term period, they are going to create great returns for investors. (Analysts’ price target is $11.00.)

Phenomenal management. You have to look at this as a big mutual fund of investments in healthcare and biotech. They are sitting on a ton of cash, and probably just waiting in the weeds for some fallout from some of the other companies in order to make a big move. This is for extremely patient investors. As a long-term investment for your kids and grandchildren, you can’t go wrong.

Over the long-term, you can’t go wrong with this. You are paying premium for their BV at this point. It has a lot of cash with a limited amount of businesses that are generating free cash flow at this time. It is run by the best management team in the country. They are patient and have done this in the past. This is going to be the company that picks up good things when things blow up. They are planting a lot of seeds that one day will pay off in dividends.

Basically a company that acquires pharmaceutical products, typically from other large established companies. Ranks in the top 3^rd of his database. Earnings have been a bit challenged for the coming quarter. Most recently, sales were up 26% and earnings were up 54%. In the coming quarter,it is expected to have a step back, and earnings are expected to be $.03 versus $.08 last year. Earnings estimates have been shaved by 15%, and earnings for 2017 versus 2016 are literally unchanged at $.13 per share. Against a $10 stock price, that gives you and 82X PE multiple with low to no growth. There is a lot of competition and better opportunities in others.