Ekf Diagnostics Share Discussion Threads

[wan] 14/4/2022 10:11

I do appreciate that I have been swimming against the tide, but I remain focused on what lies ahead, which should hopefully provide catalysts for the tide to turn!

[tongosti] 14/4/2022 09:40

When you're down 50% and still can't find the reason why - maybe your hypothesis needs a major review? Just a thought. Chances are you are missing something big - not me telling you this but Mr Market. As the expression goes, 60 million Frenchmen can't be all wrong. Good luck old chap.

[wan] 14/4/2022 09:17

Tongosti...Work that out for yourself, but I think you have misinterpreted my remark in post 2652.

It will be interesting to see the details of the remuneration package for Mike Salter, which I am quite sure will include a takeover scenario as he builds-out a company that could grow to become a midcap.

More time will tell whether the belief that some have, has been worth holding onto the long-term investment rationale, which I accept has been dented by the recent share price action.

[tongosti] 14/4/2022 09:01

Wishful thinking taking over for a change pal - how come the price went down throughout the buyback period? Keen for you to elaborate - if you can.

[wan] 14/4/2022 09:00

One very large overall and evolving opportunity is how healthcare is changing in terms of delivery, and as a consequence of the pandemic. In this regard, in my opinion it's also worth watching Amazon (excerpts follow)-

In an internal email, Amazon's new healthcare boss lays out the 'four key pillars' of the company's growing health ambition
Eugene Kim 12 hours ago

Amazon's new healthcare boss said his team will center around these four key pillars: primary care, pharmacy, partnerships, and technology.
Neil Lindsay was named Amazon's new healthcare boss late last year.
Lindsay also formally announced the additions of two new VPs to his team.
Amazon's healthcare team will primarily focus on four core areas going forward as its new leader looks to establish the future direction of the retail giant's new business.

In an email to the team on Monday, reviewed by Insider, Amazon's SVP of health and brand Neil Lindsay laid out the "four key pillars" of the company's healthcare business. Lindsay, who was put in his newly created position late last year to oversee Amazon's main healthcare initiatives, said the decision was made after months of discussions with his leadership team across Amazon's pharmacy, primary care, diagnostics, and other healthcare projects.

Amazon Care: Amazon's primary care offering, which is now available in 50 US states

Amazon Pharmacy: Amazon's online pharmacy service, which is also now available in 50 US states

Partner Services: Team focused on "determining what other offerings we might need to make available — often with and through partners — to make it easier for customers to find what they need to get and stay healthy," the email said.

Storefront and Shared Tech: Team that will build the technology to "make it easier for customers to find, buy, and engage with the healthcare services and products they need," the email said.

It also has a separate diagnostics unit and other health projects, including Halo, a fitness tracker for sleep and heart rate.

Full story, worth reading/digesting in Business Insider -

[wan] 14/4/2022 08:30

Clearly there was demand for the share buyback, and that should be 'crystal clear' to most observers.

Going forwards, and amongst other (subsequent) future updates/news, I wouldn't be surprised to also see the announcement for the new remuneration scheme for the new management.

[tongosti] 14/4/2022 08:12

The only reason for share buybacks is management looking after their share options and KPIs. Why do you think there were illegal 40 years ago?!?! There were millions of shares being bought yet the market went down. mr Market tells you selling pressure is far bigger than buying one. Classic demand supply imbalance (agreed this is beyond your area of expertise old chap)

[wan] 14/4/2022 07:46

Buywell...Under your scenario of NAV/share, hardly any companies would be
undertaking share buybacks!

You know as well as I do, that there are many underlying reasons for share buybacks, and we know from the Growth Strategy that EKF are not short of growth opportunities and are indeed investing accordingly. So, it's probably best to stick with the share buyback representing an expression of confidence in the business and the effective execution of the growth strategy.

[buywell3] 13/4/2022 23:15

wan

Ref your reply about buybacks shown below

Share buybacks only make sense when the NAV/share is above the current share price and therefore shares are being bought at a discount to the NAV/share.

Which then could in some cases be like the company buying back its own debt at 50p in the £1.

As we stand here the advfn NAV/share is BELOW the current share price so the board are literally using shareholders money to buy £1 coins for £1.50 each.

advfn have the NAV at circa 20p and the buybacks have been at twice the price or 4 times the price if Net Tangible Asset Value per share were used

Net Tangible Asset Value PS * 11.26 p
Net Asset Value PS 20.42 p


This in effect is cash wasteful and could lead to the share price falling due to the market seeing such an action as a waste of valuable capital reserves in prevailing and deteriorating market conditions .

Worthy of consideration ?

----------------------------------------


wan5 Apr '22 - 09:13 - 2616 of 2648
0 1 0
Buywell...5,950,000 to be precise!

I duly noted SBI's results.

There is an important and fundamental difference regarding the buyback. SBI's recent acquisition, along with future earnout payments are all payable in cash. Whereas EKF's recent acquisition was satisfied by the issue of new ordinary shares at 80p+ to the value of £10mn. A similar amount of shares are now being bought back at 40p+ and held in treasury. And as my post 2612 above alludes to, the treasury shares could potentially be utilised to satisfy the ADL earnouts.

And wouldn't it be good business if the shares at the various earnout anniversaries are materially higher than current buybacks, potentially meaning in my book that the treasury shares were even better value (to EKF and its investors), bearing in mind that the price per share issued to satisfy any earnout payments will be calculated using the average mid-market closing price of EKF’s shares for the five working days immediately preceding the issuance date of such shares.

Obviously we don't know where the share price might be come October (1st ADL anniversary), but we know there will be news flow between now and October and we know there are various developments in the pipeline, including further execution on the Growth Strategy.

So, for the purpose of an example and perhaps only for those with a positive and longer term view on EKF. Imagine a scenario where earnouts are calculated at an average mid-market closing price of EKF’s shares at 60p+ (being conservative!) when EKF are holding shares in treasury bought at 40p+.

Food for thought!

[tongosti] 12/4/2022 16:40

A collapse slowly starting two years ago only to convert into a Big Bang is "short term" for our good old Wan - you're the man:)

[wan] 12/4/2022 10:06

Too busy atm to respond to short-term matters!

Bearing in mind that EKF is upgrading and installing a range of state-of-the-art new fermenting technology, anyone who has been paying any attention to the fermentation market for life sciences (Danaher's acquisition of Aldevron, for a cash purchase price of approximately $9.6 billion last year and signalling the increasing interest in this area), may ultimately get a better view on what lies ahead for EKF's Life Science division (and potentially in turn EKF's laboratory and Point-of-Care divisions). Especially as this will result in proprietary third party products, and perhaps underappreciated, proprietary EKF diagnostic enzymes.

I particularly like the fact that EKF's existing site in Elkhart, Indiana, will also become a development and tech transfer site supporting the new larger fermentation site, which adds a new dynamic for EKF's existing and potential new customers (as exemplified by the increased interest in EKF's fermentation offerings post the ABEC announcement), and indeed a new dynamic for EKF itself in terms of diagnostic assays.

[tongosti] 12/4/2022 08:46

Wan - if those buybacks couldn't help arrest the decline, what will? Moral - Mr Market is bigger than anyone in this game. Hence it pays to listen to him.

[matthew palmer] 11/4/2022 16:51

Anyone on TECHINVEST, I am wanting to form a group of similar minded people to discuss its views etc and information.

Click my name and send a message.

[matthew palmer] 11/4/2022 16:42

Anyone on TECHINVEST, I am wanting to form a group of similar minded people to discuss its views etc and information.

Click my name and send a message.

[tongosti] 08/4/2022 17:30

Share buybacks were illegal on both sides of the pond 40 years ago. And for a good reason. It's simply financial engineering signalling growth (contrary to what naive players may believe) has dried up.

[cisk] 08/4/2022 16:44

Re buybacks - they shouldn't have done it at all.

IMHO buybacks are for large corporates who have a cash cow business who want to achieve management bonuses based on increase in EPS and surefire way is via a buyback. I worked on one of the first utility ones in the UK way back - and that was the only objective. It's like putting up a sign saying we have no other use for the cash and we don't know what to do with it. So a big mistake I feel.

Far better to keep the money in the business.

Anyway, too late now. Let's hope they don't do another tranche.

[tongosti] 08/4/2022 12:41

Wise words indeed - can't agree more.

[buywell3] 08/4/2022 08:53

Re buybacks , IMO they have bought way too soon

The 9M is about to dry up today with 200k buybacks left

No sensible investor would have weighed in with this falling knife situation

You wait till the chart forms a bottom

[bobdown2] 08/4/2022 07:29

Spotted the rns.. whilst investors like to see companies buying businesses to increase their business and revenues.! In these markets it makes sense to buy back your own shares whilst the price is cheap and give the share price protection from unnecessary pain. Novacyt should have done it.

[tongosti] 07/4/2022 18:32

True that but you are now talking about something different in that you are talking about the way you decide to "source" opportunities in the markets rather than tour your entry / exit positions (which are always aligned (long or short) if one is to turn a profit) Re commods - the entire complex. Check out SALL - a very comprehensive ETP giving you inverse exposure to the whole basket. Good luck.

[cisk] 07/4/2022 18:21

I mean the market does not always price stocks correctly. It's driven by supply & demand, and irrational at times.

Which commodities?

[tongosti] 07/4/2022 18:07

And yea been having a short for ages on ekf (otherwise why would I appear on this board). small position though - not out of want but out of circumstances. One can't shift a proper size on the short side with such a minnow like ekf (this doesn't hold true on the long side of one builds up a position over several days).

[tongosti] 07/4/2022 17:40

Not sure what you are trying to say but Mr Market is always right. FACT not fiction (one only makes money by being on the right side (long or short) of him - please let me know if you may have discovered another way , keen to learn). Don’t take my word for it. Take Paul Tudor Jones’ / Jim Simons’s / Stan Druckenmller’s (or Jesse Livermore’s if you care to go a bit back in history of market giants). Look them up.

No stock exposure at the moment. Gradually building a short commodities position whilst biding my time to go short rates (when stars align).

[cisk] 07/4/2022 16:53

Tong, you are correct and I walked back my comment at the time. Investing isn't personal, we may differ in approaches and tone but that's what makes life interesting.

I do disagree with your view on Mr Market though. He's not the judge of all, not by a long stretch. And it implies the market always gets it right -all of the time - which never happens.

Anyway, did you short EKF down from the 80s? And where else are you casting your net?

As for Wan, I appreciate his wider posts on the subject matter, and understand his enthusiasm, but assess objectively.