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Varchild2008 (84.28)

A Sinner in a Vacuum (SVA)

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November 25, 2009 – Comments (3) | RELATED TICKERS: SVA

So... next week shall shed some intriguing light over SVA's just announced today Joint Venture.

They will be 55% owners in a joint venture for a facility that will increase their human vaccine production.

SVA is a rarity in Biotech where they have lots of positive cash flow and little to no debt.
At any time they can tap their recently registered shelf to generate up to $10 million dollars more of money for expansion purposes....of course as I understand it this would be share dillution for investors.... But the impact of SVA expanding their business easily offsets share dillution if they TAP the Shelf Registration because of their need to fund this Joint Venture.

So.... This is simple...This is going to make SVA move from small cap to mid cap when all is said and done.

Hmm.... and people thought H1N1 was the reason to be an SVA investor? .... Think again.

DISCLOSURE:  I own 350 shares of SVA.....Yes... I am a sinner in a vacuum... SIN-O-VAC

3 Comments – Post Your Own

#1) On November 25, 2009 at 8:33 AM, Varchild2008 (84.28) wrote:

SOME CLARIFICATION:

1.  SVA will be a speaker during next week's 2 day Piper-Jaffray conference.

2.  SVA 55% owners by end of 2010.. not right away.

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#2) On November 25, 2009 at 11:15 AM, leohaas (92.76) wrote:

H1N1 is not a good reason to own any maker of vaccines. Making flu vaccines is not a business with big margins or a moat...

There may be other good reasons to own SVA, like you suggest, but H1N1 it aint!

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#3) On December 14, 2009 at 1:34 PM, malcolmcochran (51.35) wrote:

Naturally, I can't se the future. But if making flu vaccines isn't a business with a moat, then I suggest making vaccines (of various sorts) is a business with ready customers. This is increased by the huge population in Asia where vaccines are used to prevent, rather than treat, disease. So vaccine producers are selling to a huge popn. And where are the competitors there? Can't see any!

A different but key point is, is the company "honest"?  It seems to me that it is. It got rid of a "nepot" a few years back and its reports suggest it's keen to present an honest financial picture.

But if you argue that vaccines aren't lke blockbuster drugs, just a commodity, we have to use metrics for a small/medium company with a secure customer base. Maybe its PE should be, say, 12 not 28. 

I think its earnings in the near future might bring it into line (PE 12?) at $6 or $7 .

 

 

 

 

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