Knight Therapeutics (GUD.TO)

They are not going to be taken over. They are sitting on a good amount of cash. They may buy some good assets on the cheap. This is driving the stock upwards. It is more of a mutual find on the health care industry. It is for long term investors.

A Canadian health care holding company run by Jonathan Goodman, who formerly ran Paladin, a Canadian success story. It is a little expensive here. A holding company sitting on a lot of cash, and there is a lot of goodwill built into what people think he is going to do with the money. He would prefer to wait to see where he invests. (See Top Picks.)

Not a lot to say on this. It has production, and it has tremendous links through the Pharma world. It will secure more opportunities. It is in no way an endangered company.

(Market Call Minute) Excellent for the long term. It is doing nicely again out of the trough.

While this has gone down in the healthcare bear market, it hasn’t gone down as much as others. The reason is that Jonathan Goodman took his previous company Paladin Labs to $145, and it took 19 years. This is going to be a very long-term hold. Mr. Goodman has amazing connections into the pharmaceutical industry for acquiring and participating in drugs. Has also long participated in financing for others.

(Top Pick Jan 6/15, Up 9.89%) Stay with it. The chart looks good. It is trying to break out of a triangle. Stay with it.

Great company. Well-managed. Very well capitalized. Lots of cash, but not a lot of earnings in the pipeline in the short term. Ultimately to get this stock lifted out of the $6-$8 range it has to have some earnings that are going to kick in. If this company were ever going to become a hostile raider, there is a lot of stuff in the Pharma space that is on sale. He would love to see this company take a run at some of these bombed out stocks. They have the balance sheet to do it, but he doesn’t know that that is their style. Let the company mature a little bit more and revisit it in 12-18 months.

Very well known management and is the only thesis right now because the company is very early in its genesis. The X-team is from Paladin, which was sold for a multibillion dollars a few years ago. Management took a couple of products and went out and raised a bucket load of money. Had more than $400 million in cash. With all that cash, they are making deals to feed the future. They are doing licensing deals and some finance deals, where if you are a small biotech company they are lending you money and getting access to your products because of that. They are going to know your products intimately because of that relationship. Have done quite a few deals and the market cap is in the $700 million range, so they still have $400 million in cash. Insiders own 30% of the company. For those who just can’t stand the gyrations of some of the other biotechs, here is a stock where that cash supports the valuation.

This is his long term play. Very good management. This is one you have to be patient with. A great, long term hold.

Small healthcare company. Started by the same gentleman that ran Paladin Labs. He had a major accident and sold out and is starting again. The stock is starting to trend. Ron Meisels owns it and wants to be there. He thinks it looks good. Major support of the stock around $7. He believes it is an excellent buying opportunity.

Has $500 million in cash in a $600 million market cap company. Johnson Goodman is a very careful acquirer and wants to buy things very inexpensively. Thinks it is going to take him a long, long time to deploy the capital. They have all this cash, but in order for the stock to lift beyond its Book Value, it has to ultimately convert into earnings. He doesn’t see their earnings coming anywhere in the short term.

He is positive on a very long-term progress of them. In the short term, it has been hit by the summer doldrums and the proliferation of many other companies in the Pharma space. You have to view this as long term.

It is getting down to its cash level. You are paying for a good management team that owns a lot of stock and not paying much more for them in a volatile sector. The management team knows exactly what they are doing. They should reward shareholders nicely over the next ten years.

They are a consolidator of businesses. Their management has a good track record even though they have not done a lot of deals in this company. The stock has come off because some of these other companies in the sector have done deals. He would prefer VRX-T.

Had owned this in the past. If you believe in Jonathan Goodman, he has a phenomenal track record at Paladin. He is going to build a lot of value and is a large shareholder himself. In the short term he has a lot of cash, and people get nervous about what he is going to do with it. A bit of a black box at this time. However, some of the deals he has made so far have been phenomenally successful. Thinks the stock will go higher over time. His preference would be Concordia (CXR-T) or Merus (MSL-T), which have better opportunities. This is one he watches and would trade around. If he got a little bit cheaper he would probably buy it.