CRSP

Shares of Top Biotech Idea Vertex Pharma Volatile But Company Fundamentals Sound

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Image Shown: Shares of Vertex Pharmaceuticals Inc have surged higher over the past year. We continue to like the biotech firm in our Best Ideas Newsletter portfolio. By Callum Turcan The biopharmaceutical space is full of attractive investment opportunities, though early-stage firms without commercialized drug portfolios are quite risky investments given their lack of meaningful revenues and sizable negative cash flows. Vertex Pharmaceuticals Inc (VRTX), on the other hand, has a commercialized portfolio of therapeutics that treat cystic fibrosis (‘CF’) which enables the biotech firm to generate substantial revenues and cash flows. We include Vertex Pharma as an idea in the Best Ideas Newsletter portfolio. Overview Due to the asset-light nature of its business model (most expenses flow through R&D … Read more

Our Favorite Biotech Vertex Pharma Powers Ahead, Leaps 6%+

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Image: Vertex Pharma continues to soar toward our fair value estimate. By Brian Nelson, CFA  On Wednesday, January 26, Vertex Pharma (VRTX) reported solid fourth-quarter results that showed continued advancement across its clinical pipeline. For background reading on our thesis on the net cash rich, free cash flow generating biotech tied to established cystic fibrosis (CF) therapies and CRISPR technology, please read: “Best Idea Vertex Pharma Boosts Guidance (Again), Buying Back Stock While Awaiting Key Clinical Trials (December 2, 2021)” and “Best Idea Vertex Pharma Marching Forward with Innovative CRISPR Technology” (August 31, 2021).” Following fourth-quarter results, we’re reiterating our $250 per share fair value estimate at this time.   Image: Vertex finished an exciting 2021, and we look forward to … Read more

Some Questions Answered: The Fair Value Estimate Range and ROIC

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Q: In the 16-page stock reports, why doesn’t the ‘percentage undervalued / overvalued’ match up to the actual discount/premium to Valuentum’s fair value estimate of the company? A: We view the intrinsic value of a company as a Fair Value Range, not necessarily a single point estimate, so the undervalued and overvalued calculations match up to either the low fair value estimate or high fair value estimate, respectively. Within the context of a margin of safety, we wouldn’t necessarily view a company to be worth precisely $55 per share, for example; instead we’d view the company as worth between $50 (low end fair value estimate) and $60 per share (high end fair value estimate), with the low and high fair … Read more

Best Idea Vertex Pharma Marching Forward with Innovative CRISPR Technology

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Image Shown: An overview of Vertex Pharmaceuticals Inc’s commercialized drug portfolio and pipeline. Image Source: Vertex Pharmaceuticals Inc – Second Quarter of 2021 IR Earnings Presentation By Callum Turcan The world of medicine and therapeutics continues to evolve, with gene editing CRISPR technology offering the medical community an immense source of potential life-saving therapies over the years and decades to come. Our favorite way to gain exposure to this space is through Vertex Pharmaceuticals Inc (VRTX), an idea included in the Best Ideas Newsletter portfolio. What Is CRISPR? In short, CRISPR gene editing technology can identify a specified portion of DNA in a cell and when done properly (this is no easy task), CRISPR technology can alter that DNA, potentially … Read more

Facebook, PayPal, Apple Earnings Reports and More!

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Image shown: Qualcomm’s chart is looking mighty attractive. By Brian Nelson, CFA We continue to like Facebook (FB), PayPal (PYPL) and Apple (AAPL) as ideas in the Best Ideas Newsletter portfolio following their calendar second-quarter 2021 reports, released recently. Vertex Pharma (VRTX) is our favorite way to play emerging CRISPR technologies through its partnership with CRISPR Therapeutics (CRSP), and we were mighty pleased with Dividend Growth Newsletter portfolio holdings Republic Services (RSG) solid 8% dividend increase and Qualcomm’s (QCOM) impressive momentum. Facebook’s revenue soared 56% in the second quarter, and the company leveraged its operating margin to over 1000 basis points of year-over-year expansion. Both net income and diluted earnings per share more than doubled at the social media giant … Read more

Vertex Pharma Still Extremely Healthy Even After VX-864 Disappointment

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Image Shown: Vertex Pharma has a huge net cash position on the balance sheet offering it tremendous financial flexibility. Image Source: Vertex Pharma. By Brian Nelson, CFA A broadly diversified stock portfolio of 15-25 securities or no less than 15 securities across most, if not all S&P 500, sectors may make sense for a lot of long-term investors. Included in this diversified mix of equities may be biotech exposure, and our favorite way to play the speculative biotech space, albeit in a very small allocation in the Best Ideas Newsletter portfolio, is with Vertex Pharma (VRTX). We’re not making any changes to the newsletter portfolio in light of news of a recent setback at the company. On Thursday June 10, … Read more

Best Idea Vertex Pharma Continues to Impress

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Image Shown: We are big fans of Vertex Pharmaceuticals Inc and include shares of VRTX as an idea in our Best Ideas Newsletter portfolio. The biotech firm posted a solid first quarter 2021 earnings report in late-April. Image Source: Vertex Pharmaceuticals Inc – First Quarter of 2021 Earnings IR Presentation By Callum Turcan On April 29, Vertex Pharmaceuticals Inc (VRTX) reported first quarter 2021 earnings that beat both consensus top- and bottom-line estimates. Its GAAP revenues popped higher by 14% year-over-year as sales of its TRIKAFTA/KAFTRIO therapeutic offerings (TRIKAFTA is the US brand name, KAFTRIO is the European brand name) which treat cystic fibrosis (‘CF’) grew by 33% year-over-year. Economies of scale and revenue growth enabled Vertex Pharma to grow … Read more

Video: Apple’s Cash Based Sources of Intrinsic Value and Dividend Health

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Image Shown: Inside an Apple store. Source: Valuentum By Brian Nelson, CFA The core of stock valuation centers on two cash-based drivers: the net cash a company has on its balance sheet and the enterprise free cash flows that it will generate in the future, discounted back to today at a reasonable discount rate. After subtracting the value of other components of the capital structure such as preferred stock or debt from the sum of net cash and the present value of future enterprise free cash flows and dividing by total diluted shares outstanding, the result is called a fair value estimate. The fair value estimate is then compared to the stock price to determine if shares are undervalued or … Read more

Vertex and CRISPR Therapeutics Partnership Update

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Image: Vertex Pharma is co-developing gene-based therapy for sickle cell disease (SCD) and transfusion-dependent beta thalassemia (TDT). CTX001 may offer a potential cure for people that have SCD and TDT. By Callum Turcan We include shares of Vertex Pharmaceuticals (VRTX) in the Best Ideas Newsletter portfolio and continue to view the biotech company quite favorably. Our capital appreciation thesis on Vertex Pharma is partially built upon the “call option” related to potential upside that various partnerships, including that with CRISPR Therapeutics (CRSP), could uncover. Even if such promising partnerships don’t pan out, however, Vertex Pharma’s free cash flow growth outlook underpins the higher end of its fair value estimate range, which currently sits at $321 per share (well above where … Read more

Why You Need to Hire an Active Stock Manager and Ditch Modern Portfolio Theory

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Image: Why You Need to Hire an Active Stock Manager and Ditch Modern Portfolio Theory. An Approximate Hypothetical representation of an active manager that charges a 2% active management fee that mirrors the S&P 500 benchmark versus an advisor that charges a 1% advisor fee that applies a 60/40 stock/bond rebalancing from 1990-2021. Approximate Hypothetical returns are based on the following extrapolation: “Since inception in November 9, 1992, returns after taxes on distributions and sales of fund shares for the [Vanguard Balanced Index Fund Investor Shares] VBINX came in at 6.5% through June 30, 2020, while the same measure since inception in January 22, 1993, for the S&P 500, as measured by the S&P 500 ETF Trust (SPY), came in … Read more