SIGA Technologies Inc.Pembelian
SIGA Technologies Analysis 6/24
Diupdate
Disclosure: As of 6/24 I am long SIGA Technologies SIGA
SIGA Technologies is a bio pharmaceuticals company that is in the public health market. They develop and sell products to treat Smallpox, Ebola, and other public health threats.
Management Effectiveness: The company has been consistently profitable since 2018, with margins averaging 30%-40% in recent years with only a few unprofitable quarters.
Very quickly after the company became profitable they brought the debt to essentially nothing.
In recent years the company's return on equity has been above 25%, indicating their research spending is used effectively.
The company has a large cash position for potential investment in research.
Valuation The company trade at a P/E of 6 and a p/cf of 8 they have paid special dividends for several years and could potentially implement a stock buyback program, at least that is something I would be considering if I were a board member (Disclosure: I am not a board member obviously).
SummarySIGA is a well run company, trading at an excellent valuation if you are willing to take the risk of a concentrated portfolio of products and volatile returns. They have several positive tailwinds including: International Expansion, Re-Valuation of the company due to implementation of a dividend or buyback policy, and increased public health awareness by international governments.
SIGA SIGA Technologies is a bio pharmaceuticals company that is in the public health market. They develop and sell products to treat Smallpox, Ebola, and other public health threats.
Management Effectiveness: The company has been consistently profitable since 2018, with margins averaging 30%-40% in recent years with only a few unprofitable quarters.
Very quickly after the company became profitable they brought the debt to essentially nothing.
In recent years the company's return on equity has been above 25%, indicating their research spending is used effectively.
The company has a large cash position for potential investment in research.
Valuation The company trade at a P/E of 6 and a p/cf of 8 they have paid special dividends for several years and could potentially implement a stock buyback program, at least that is something I would be considering if I were a board member (Disclosure: I am not a board member obviously).
Summary
SIGA is a well run company, trading at an excellent valuation if you are willing to take the risk of a concentrated portfolio of products and volatile returns. They have several positive tailwinds including: International Expansion, Re-Valuation of the company due to implementation of a dividend or buyback policy, and increased public health awareness by international governments.Catatan
Another potential catalyst is short covering, so long as the fundamentals remain strong then they will need to cover their positions eventually. With current short interest at 12% from the data I could find, for short interest to reach 6% would need a substantial move. My main thesis is on fundamentals, so this is less in my wheelhouse so any input is appreciated. Have a great day everyone!Catatan
tradingview.com/watchlists/153985520/tradingview.com/watchlists/150658502/
Here is my shortlist of upcoming research reports, and macro-economic indicators I am watching
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End of day short seller covering
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Update on the short squeeze thesis. To me it looks like short sellers are attempting to exit their positions but the liquidity is not there for them to do so.
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fintel.io has some interesting data on the short interest and shares available for short sellers. All available for free. I have been checking it daily and have seen a consistent decrease in the amount of shares available for short sellers to cover. It is my opinion that most of the volume is short covering, but from valuation perspective I am still buying below $8Catatan
My current price target is ~$20 which would give the company a P/E in the high teens. If the company's earnings and revenue grow in the coming months and years the potential could be higher, especially as more institutional money enters. (Very difficult now with such a small market cap)Catatan
Tomorrow is likely the last day I will be buying shares. Be careful of market open volume, watch for mid day drop in volume and share price. My personal target price is to enter below $8 per shareCatatan
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In the coming weeks I will be researching pharmaceutical companies open up a short position on to hedge market risk for my SIGA position.Catatan
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Likely today's best entry prices. Also considering short Merck Pharma to hedge.
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