Closing RAIN
Adding Genomma
Rain Oncology (RAIN) is being bought out for $1.16 + CVR worth up to $0.17/share. This seems like a worse deal than the $1.25 + CVR Tang was offering, but ok, I will take it. Usually these CVR’s should be valued at a large discount to their upper value, so I see no reason to hang around in this one so closing this one for a 15% gain at $1.18.
Then I decided to take a large stake again in Genomma (LABB). Technically I never closed this one, and it has underperformed in 2023, but 2024 might be their year. This graphic was a major reason why:
The stock trades at 5x EV/EBIT. They are executing well on their cost reduction initiative and growing revenue in non-hyperinflation segments by 9%. If Milei is successful at stemming hyper inflation and actually putting Argentina into growth mode again then their problem segment might turn into a growth segment.
This is a branded household goods company with 20-30% ROIC. I think it should trade 50-100% higher than it currently is.
It would be a lot more convenient to do these updates in some other way. I hate to spam people’s email inbox with every little update. But it is difficult to do this in the comments of my blog posts since there is no notification button. There is a substack note, but I don’t think Substack email subscribers get an update if I post something there.
Just fyi, I like this format of small updates in the blog.
Re LABB, what does 'sale of repurchased shares' mean? They are selling stock in 2020,'21,'22, and '23? While simultaneously repurchasing shares?
thanks for your updates. This learning is great for newbies.