Star Scientific And TherapeuticsMD: 2 Overvalued Pseudo-Pharmaceuticals

Disclosure: I am short STSI, TXMD.OB, CRVW.OB. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
A professional investment process is similar to peeling an onion. We peel the garbage layers of skin to arrive at a substantive core. The short opportunities are those companies that have virtually nothing after stripping away irrelevant news releases and overhyped promotional campaigns. TherapeuticsMD (TXMD.OB) and Star Scientific (STSI) epitomize this type of short opportunity.

 

Name

Ticker

Price

Ent Val

Revs

EV/Revs

Net Loss

Star Scientific

STSI

$3.17

$454M

$5.4M

84x

-$33.1M

TherapeuticsMD

TXMD.OB

$2.93

$298M

$3.1M

95x

-$39.0M

Normally, stocks valued in the $250M-to-$500M range have hundreds of millions in revenues, and tens of millions in net profits. But both TherapeuticsMD and Star Scientific have revenues under $6M with net losses in excess of -$30M. So, these stocks need to have amazing realizable future value to justify their current prices. So let's start peeling the onion, and see what valuations are fundamentally justified. READ FULL ARTICLE HERE

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