After 12 years with no posts, one might think TECH was defunct. Actually it has been on a tear for the last year and over $500. No, actually the tear has been closer to 9 years long. Earnings, circa $7, while promising, don't seem to justify such a high price. Yet I just sold a $400 put for $37 and am thinking I might be crazy. The sale was in conformance with a personal heuristic which maybe should not apply to a case such as TECH.
The price today is down over 5% to $405 following over $100 decline in the last month, but I did notice that CCXI, of which I think they still own 10%, was up 6%. In two of the past 4 years they've had to reduce earnings to reflect large declines in the value of their ownership there, and now that a drug, Tavneos (avacopan) has been approved in Japan and the US as of Oct. 21, we are hopefully awaiting their first sales figures. Meanwhile, Techne should not have to report large reductions in book value due to CCXI's price drops for a while.
Of course the reason I may be crazy is that $400/$7.00 makes a PE of over 50. And if the market tanks as I think possible, $140 seems well within reason and I'll have shares for which I paid nearly 3 times as much as that. I had repurchased a lot at $260 last year due to the sale of another lot at $260 on a sold call. So far that purchase looks OK, but it too could wind up far underwater. Oh, and I had a Jan. 22 call sold on TECH $510's so that makes another nice bonus of $22. |
