Is it a good company at a reasonable price? I plan to hold on to the shares that I have currently. I have no plans to buy any more. I do not have much money to spend on shares. The testing I could do is showing the stock price as relatively cheap.
I own this stock of HLS Therapeutics Inc (TSX-HLS, OTC-HLTRF). I got this stock because it did a reverse takeover of Automodular Corp (TSX-AM, OTC-AMZKF) on March 12, 2018. I bought some stock in 2018, 2020 and 2023 because this is a Health Care sector stock and there are few of them in the Canadian market.
When I was updating my spreadsheet, I noticed insiders who are staff are buying shares in this company. Few of the directors have shares, with main exception being chairman. Two other directors have shares, but the rest do not. They just got a new Chairman and he just bought shares.
I have not done well with this stock. I have a loss of 25.39% per year with a capital loss of 27.08% and dividends of 1.69%.
If you had invested in this company in December 2013, for $1,008.99 you would have bought 88 shares at $11.47 per share. In December 2023, after 10 years you would have received $83.60 in dividends. The stock would be worth $371.28. Your total return would have been $454.88. This would be a total loss of 10.58% per year with 12.47% from capital loss and 1.89% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $11.47 | $1,008.99 | 88 | 8 | $83.60 | $371.28 | $454.88 |
The dividends have been suspended, so there is no current yield for testing purposes nor can I look at Dividend Payout Ratios (DPR).
Debt Ratios fine, but Intangible Assets and Goodwill are rather high. The Long Term Debt/Market Cap Ratio for 2023 is fine at 0.83 and currently at 0.88. The Intangible Assets and Goodwill Ratios are too high at 1.59 and currently at 1.65. These should certainly be below 1.00. When these items get too high, a company might just write them off. The Liquidity Ratio for 2023 is good at 1.65 and 1.56 currently. The Debt Ratio for 2023 is good at 1.80 and 1.82 currently. The Leverage and Debt/Equity Ratios for 2023 are fine at 2.25 and 1.25 and currently at 2.22 and 2.22.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term | 0.83 | 0.88 |
| Intang/GW | 1.59 | 1.65 |
| Liquidity | 1.65 | 1.56 |
| Liq. + CF | 2.15 | 2.04 |
| Debt Ratio | 1.80 | 1.82 |
| Leverage | 2.25 | 2.22 |
| D/E Ratio | 1.25 | 1.22 |
The Total Return per year is shown below for years of 5 to 8 to the end of 2023. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2018 | 5 | -12.94% | -20.99% | -23.06% | 2.07% |
| 2015 | 8 | -10.58% | -12.47% | 1.89% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are negative and so useless. The corresponding 8 and historical P/E Ratios are also negative and useless. I cannot do any P/E Ratio testing.
I cannot do any Graham Price testing because of earning losses.
I get a 10-year median Price/Book Value per Share Ratio of 1.77. The current P/B Ratio is 1.05 based on Book Value of $89.1M, Book Value per Share of $2.79 and stock price of $3.72. The current P/B Ratio is 41% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap
I also have Book Value per Share estimate for 2024 of $2.54. This implies a book Value of $81.2M and a P/B Ratio of 1.15 based on a stock price of $3.72. This ratio is 35% below the 10 year median ratio of $1.77. This stock price testing suggests that the stock price is relatively cheap.
I get a 10-year median Price/Cash Flow per Share Ratio of 13.85. The current P/CF Ratio is 6.96 based on Cash Flow for the last 12 months of $17.08M ($12.5M US$), Cash Flow per Share of $0.53 and a stock price of $3.72. The current ratio is 50% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I cannot do any dividend yield testing because the dividends have been discontinued.
The 10-year median Price/Sales (Revenue) Ratio is 4.71. The current P/S Ratio is 1.50 based on a stock price of $3.72, Revenue estimate for 2024 of $79M ($58M US$), and Revenue per Share of $2.47. The current ratio is 68% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
Results of stock price testing is that the stock price is probably cheap. What testing I can do is pointing to a relatively cheap price. The P/S Ratio testing is saying this also. I did the testing in CDN$ because this stock is not much traded in US$ even though the reporting is in US$.
When I look at analysts’ recommendations, I find Strong Buy (1), and Hold (3). The consensus would be a Buy. The 12 months stock price consensus is $5.31 ($3.885 US$) with a high of $9.51 ($6.953 US$) and low of $3.75 ($2.74 US$). The consensus stock price of $5.31 implies a total return of $42.79%, all from capital gains.
There are no entries on Stock Chase for this company. Adam Othman on Motley Fool look at this stock in 2023. Christopher Liew ion Motley Fool liked this stock in 2022 because it paid a dividend. The company put out a Press Release about their fourth quarter of 2023. The company put out a Press Release about their results for the first quarter of 2024.
Simply Wall Street via Yahoo Finance put out a report on this stock and says it might be undervalued. Simply Wall Street has 2 warnings of currently unprofitable and not forecast to become profitable over the next 3 years; and does not have a meaningful market cap (CA$124M). Simply Wall Street gives this stock 1 and one half star out of 5.
HLS Therapeutics Inc is a specialty pharmaceutical company. It is focused on the acquisition and commercialization of branded pharmaceutical products in the North American markets. The company products include Clozaril, Vascepa, CSAN Pronto, and others. The company earns revenue in the form of product sales and royalties, out of which product sales contribute to the majority of the revenue. The company operates in Canada, and the United States, and the Rest of the world. Its web site is here HLS Therapeutics Inc.
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