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Biotech / Medical : TECHNE (Tech): "selling picks to gold miners"
TECH 77.31+1.2%Jul 12 4:00 PM EDT

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To: Lance Bredvold who wrote (38)6/9/2022 10:30:09 PM
From: Lance Bredvold   of 46
 
Today the market is down nicely but well above the 80% of the S&P500 high (4819) at 4019 it reached a few weeks ago. I have many calls sold plus a few puts, but no TECH other than the 400's and 420's I described in an earlier post. The price today is around $360. The question now becomes: Where do I wish to buy more shares? And preferably in a tax free account since my current holdings are all in taxable accounts (I sold my tax free shares on exercised calls). I sold 1/3 of my holdings at $120 with a $10.15 call premium back in 2018. Then those at $260 plus $22 premium in 10/2020.

Mr Kummeth has been so very upbeat and I guess his enthusiasm is responsible for the price so far exceeding anything I would call reasonable. He continues to speak enthusiastically despite earnings which have been barely above the average of the previous 12 years. EPS did double the 5 years before that (2004 - 2009). As I recall Kummeth arrived from Fisher in 2012 and all this time EPS has varied around $3 per share annually. Yes, we had 3 great looking quarters reported this year and little likelihood CCXI will reduce the final quarter's results, so we may well see $6+ for 2022. Very nice, but $500 stock price? $400? I can see $140 or so if all continues to be so positive in a bearish market. And 2021 could have been over $4 if a CCXI writedown had not been required which actually resulted in a 11% decline from 2020 (which was closer to $4 at $3.86. A PE of $25 and optimistic EPS in 2023 of $8?

A problem with short calls is that they preclude me from selling the shares which I really think would be prudent except for a huge capital gain (I still have some shares which I bought in 2009 for $52.10. I don't need or want another $40-$50,000 income this year. As old as I am, I'd rather leave the shares for my legatees, but expect them to be worth far less by the day I die. It's a conundrum.

I think I'd dare to buy again at $190. Maybe sell some $210 puts.

PS. The put I sold in the last post was repurchased for just a few dollars gain.
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