Knight Therapeutics (TSE:GUD) was recommended as a neutral by Dundee Capital Markets with an C$8 target price on Thursday.
"We value the company using a sum-of-the-parts analysis consisting of cash, life science investments, lending portfolio, Medison interest, its current revenue generating products and operating burn," researchers said.
Knight reported full 2015 results on Thursday. Quarterly results are largely a non-event for the company with revenue of C$343,000 (vs. the analyst's forecast at C$475,000) and net income of C$5.5mln (vs. DCM at C$4.1mln) driven by interest income from its lending portfolio of C$6.7mln (vs. DCM at C$6.2mln).
Revenue guidance for 2016 includes C$2mln from Impavido and Dundee estimates an additional C$1mln from Neuragen and Flat Tummy Tea, complemented by C$30.4mln interest income for EPS of C$0.22.
Knight is taking a slow and steady approach, deploying capital opportunistically in low risk high return life science opportunities. Management suggested that a similar amount to the C$70mln deployed in 2015 could be expected in 2016 with C$471mln cash and equivalents on its balance sheet as of December 31 (C$120mln committed to funds).
Knight shares closed up 3.6% at C$7.56.
Amaya (TSE:AYA), an online gambling company in strife, remains a buy but the price target is lowered to C$24 from C$35 by Dundee Capital Markets.
Dramatically, the Autorité des marchés financiers (AMF), Quebec's financial regulatory and oversight body, on Wednesday filed 23 charges against three individuals and three companies, including Amaya's Chairman and CEO David Baazov, alleging the use of privileged information related to Amaya for aiding with trades, during the period of December 2013 and June 2014, leading up to the Rational Group Ltd. acquisition.
Separately, the AMF also executed search warrants and issued freeze and cease trade orders to a group of 13 individuals for allegedly trading while in possession of privileged information or for leaking privileged information related to the Rational Group transaction.
While this is a significant negative blow to the CEO and the company, both he and the company separately issued statements stating that these allegations are false and that Mr. Baazov intends to contest the accusations. Amaya's statement went on to further note there have been no allegations made against Amaya or any other of its senior managers or directors, and the company's day-to-day operations will not be impacted.
"This development obviously throws a major blow to the bid process initiated by the CEO. We believe that if current major shareholders BlackRock and Blackstone/GSO are part of the group involved to privatize the company, there is still a possibility that a bid will be put forward and the company will be privatized," said Dundee.
"In the event that the two major shareholders are NOT part of this bid process and are looking to tender, we believe that the likelihood of a bid by his group would be very slim, as Mr. Baazov would have been the anchor behind the bid.
In its opinion, Dundee said that considering PokerStars’ history, track record, and B2C business model, it believes that this will not impact operations.
Amaya shares rose 4.75% to C$15.45.
Meanwhile analysts at Wedbush said on Thursday they were reiterating an outperform rating on United Therapeutic (NASDAQ:UTHR) but reduced price target to $229 after removing implantable pump and reducing Orenitram projected revenues.
Wedbush said it calculated the 12-month price target as a sum-of-parts with the value for each product and indication derived from a 30% annual discount from the peak annual net revenues, applied a 1-10x multiple depending on stage of development to reflect risk, divided by share count and rounded to the nearest dollar.
United shares closed down 10.5% at $108.87 and was the biggest decliner in the S&P Midcap 400 index on Thursday.