QLTI – still holding strong for now

Value investing

Nearly six months ago, I updated how . At the time, I was contemplating selling at least part of my holdings because the stock had nearly reached its NCAV value at $4.01.

I’m happy to say that I decided not to sell my holdings after concluding that I did not hold a large position. It closed today at $4.64, although that’s off its high of $5.10 around Christmas of last year. Around that time, the stock jumped after news was announced that it had settled its litigation with General Hospital Corporation over a license agreement and royalty payments. Under the agreement, QLTI paid $20M for all past and future royalty obligations instead of 0.5% of sales of (a treatment for age-related macular degeneration) in the US and Canada, news which was widely received as a positive outcome for QLTI.

For those new to value investing, now might be a good time to review how to calculate QLTI’s or NCAV:

NCAV = (current assets – total liabilities)/total number of outstanding shares

Using their latest (you’ll have to click the “balance sheet” tab), we can see that QLTI has current assets of $284.86M and total liabilities of $21.96M and total outstanding shares of 54.63M. This gives us:

NCAV = (284.86-21.96)/54.63 = $4.81 per share

As of today, then, QLTI is trading at 96% of NCAV. Their next earnings announcement is due to take place March 10th. For now, I probably won’t make any changes to my holding in QLTI.

Note: As mentioned in my first post, if you choose to purchase QLTI and are a US shareholder, you should consider investing in a tax-advantaged account since QLTI is considered a and can bring significant and complex tax consequences if purchased in a regular investment account.

FD: I currently own shares of QLTI.

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