I was just looking at this company, so this deep dive is very timely. I was thinking about things like the strange situation with "compounders", or whatever they are called, making legal knockoffs of the weight drugs. Will oral weight drugs happen and take off? Will Novo be the one to make them. This way of thinking about R&D and capex as growth engines and not just an expense is interesting. As a slight counter: as a company grows wealthy, it has more money to throw at new ideas. Is it more successful at picking the new ideas? Will the research pan out, just because more resources are going towards it. I would point towards Meta and the buckets it has thrown at virtual reality, which still seems to have as much practical application as crypto at this point. I don't know how to make a paragraph break in a comment. Back to pharmaceutical companies, the industry has a known issue of, we don't know how to figure out the next great products. Maybe AI augmented research will get us there. Suffice it to say, seeing Novo Nordisk as a significant percentage of its country's gdp is astounding. Your article was food for thought for this company and others. Awesome.
What I usually do is I accept FCF with the SBC included in it; however I look at the change in total shares outstanding over the last 48m or so and extrapolate that into my DCF and other valuation metrics assuming the same trend of dilution. Would you say that’s incorrect ?
There’s several companies that use SBC but also do buybacks.
Loved the way you split up the capex; this was exactly the kind of read on FCF I was looking for; defining the earners returns !
I was just looking at this company, so this deep dive is very timely. I was thinking about things like the strange situation with "compounders", or whatever they are called, making legal knockoffs of the weight drugs. Will oral weight drugs happen and take off? Will Novo be the one to make them. This way of thinking about R&D and capex as growth engines and not just an expense is interesting. As a slight counter: as a company grows wealthy, it has more money to throw at new ideas. Is it more successful at picking the new ideas? Will the research pan out, just because more resources are going towards it. I would point towards Meta and the buckets it has thrown at virtual reality, which still seems to have as much practical application as crypto at this point. I don't know how to make a paragraph break in a comment. Back to pharmaceutical companies, the industry has a known issue of, we don't know how to figure out the next great products. Maybe AI augmented research will get us there. Suffice it to say, seeing Novo Nordisk as a significant percentage of its country's gdp is astounding. Your article was food for thought for this company and others. Awesome.
Great job!
Thank you, Nisim. Have a great weekend.
Excellent article ! A refreshing and interesting perspective on company valuation - a great new tool
You're quick JG! I appreciate that, thanks very much and have a nice weekend ahead.
Really enjoyed your article Rene !
On FCF:
What I usually do is I accept FCF with the SBC included in it; however I look at the change in total shares outstanding over the last 48m or so and extrapolate that into my DCF and other valuation metrics assuming the same trend of dilution. Would you say that’s incorrect ?
There’s several companies that use SBC but also do buybacks.
Loved the way you split up the capex; this was exactly the kind of read on FCF I was looking for; defining the earners returns !