9/10/2009

Biotechnology Micro Cap Value with Positive Insider Buys for 2009

These two ideas are selling below net cash:

KDUS; Cadus Corp, Carl Icahn buying shares, selling for less than net cash

CAPS: Orthologic Corp, selling for less than net cash, share buy backs for 2009 in the amount of 6,845,000

Additional data and several more micro cap biotech ideas with positive 2009 insider activity

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6 comments:

Floris said...

Hi,

I scanned these two companies quickly but I have no expertise with these types of investments. Although selling at a relatively high and exceptionally liquid Margin of Safety the run rate of cash is high as well (at least operationally). Thus if such firms continue on this trajectory the MoS will decrease. What is your experience with suchs firms, do they tend to liquidate within 12 months?

I'd be interested to hear your thoughts and thanks for your blog!

regards,

Floris

ShadowStock said...

Hi Floris

Thanks for taking time to read and respond. At this time I’m just trying to provide what I believe is valuable data for investors to make their own decisions.

I also have no expertise in biotechnology. My approach or thinking is simple. Management of biotechnology companies have far more insight into the science, technology and future potential of their product. Other industries have far more variables that would impact the future of their company and hence the predictive value of their purchases is less directionally powerful. Just my thoughts.

One other thing all the companies on my insider lists must pass other hurdles such as, no material dilution, cash with little debt, clean capital structure. And other metrics like activist shareholders.

I was LUCKY with other biotechnology over the past few months. QLTI at 1.78 now 4.29, FACT 8.?? now 16.00, DYAX , ICCC

http://shadowstock.blogspot.com/2009/04/informativeness-of-insider-transactions.html

good luck
John

Jeff Moore said...

you might want to take a look at CBMX (which, I am long on). Doesn't meet your typical criteria, per say, but, seems to be compelling.

Jen said...

ah yes -- duh. MPET looks very strong technically -- very big buys / huge cash/share value.

reminds me of ATPG when the CEO finally got off his ass and bought $277,000 worth at 3.47 back in March.

Quite a nice purchase that turned out to be, huh?

I like this site a lot. Thanks for writing it.

Anonymous said...

great post too Shadow! thanks! some of the most egregious returns i've ever generated were on these biotechs selling at >30% discount to cash that has some large insider shareholder, such as VNDA with Tang capital or with FACT and Baupost. i also know shite about biotech and i like your idea about following insider purchases. that and having a powerful shareholder on your side has been very positive for me.

great great blog!

ShadowStock said...

Appreciate the kind words!

I will try to make time to continue posting select current insider activity.

It has been powerful in this market when it’s coupled with multiple value metrics.

See my insider activity post on twitter the other night. You can find it on the right hand of the blog.

http://www.shadowstock.com/ss_091409.html

continued luck
John