Friday, September 12, 2014

* TherapeuticsMD (TXMD) - A Wild Stock May be Driven By a Tame Measure (7 Charts)

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TXMD closed Friday trading at $6.25, up 7.0% with IV30™ up 2.1%. The Symbol Summary is included below.

Provided by Livevol

Disclosure: The Hedge Fund is Recently Short TXMD

TherapeuticsMD Inc., is a specialty pharmaceutical company. The Company is focused on creating branded prescription, generic prescription and over-the-counter (non-prescription) products targeted for women.

This is a stock and fundamentals note where the pictures will do the talking. I'll present seven charts (time series) some of which look very promising for the firm and some of which look... not so promising.  Overall, the stock has exploded up ~160% in the last year and over 80% in the last two-years.

It's this chart that I will conclude with... Here's a taste:

We can start with the one-year stock return chart, below.

Provided by Livevol

We can see the stock was trading at ~$2.40 a year ago, hit as high as $9.01, plunged to ~$3.50 and now has recovered nicely to $6.25.  Obviously the equity market is showing great volatility, and that volatility may be understandable through some visualizations.

Revenue (TTM)
This is one of the "good" pictures... Trailing twelve month revenue has risen from ~$1M to now just under $12M.  Note, those are both pretty small numbers.

Research & Development over Operating Expenses
The company has gone from spending $0.01 of every operating expense dollar on R&D to now over $0.05.  That's a noteworthy change in strategy.

Gross Profit, 1-Year Growth
The one-year change in gross profit was expanding rapidly from Q2 2012 through Q2 2013.  However, since then that growth has dropped.  I do note, the growth is still positive.

Net Income (Earnings)
The fir has never shown a profit over a full year and losses are now nearing all-time highs.  In the trailing twelve months the firm has lost ~$35M on revenue of just ~$12.

Book Value
Naturally, with losses mounting, book value is also dropping.  I do note that the vertical axis is in increments of $0.10, so... Don't read too much into this trend.

Total Assets
This trend is the most disturbing to me.  Assets saw a tremendous growth from basically $0 up to nearly $70M.  That trend has reversed rather abruptly and the firm now shows ~$44M in assets on its balance sheet.

Stock Price vs. Assets
As I perused the visualizations, it was the measure of assets to stock price that had the most eye-popping correlation.  Certainly a pattern or correlation does not imply causality but, the trend is noteworthy.  I note also note that TXMD is starting to rise again, and we don't yet know what assets will look like in their next earnings report.

This is trade analysis, not a recommendation.

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