The Pyramid Peak, a charitable organization that was founded by guru Mason Hawkins (Trades, Portfolio), purchased 7,716,049 shares of GTx Inc. (GTXI, Financial) for 81 cents per share Oct. 14, according to a Form 4 filing with the Securities and Exchange Commission.
GTx is headquartered in Memphis, Tennessee. It is a biopharmaceutical company that is dedicated to the discovery, development and commercialization of small molecules that selectively modulate the effects of certain hormones produced by the body. The company is developing selective androgen receptor modulators – also referred to as SARMs – to potentially treat a number of serious diseases including breast cancer, stress urinary incontinence and Duchenne muscular dystrophy.
GTx has a market cap of $131.83 million, an enterprise value of $112.23 million, a price-book (P/B) ratio of 7.17 and a quick ratio of 6.19.
According to GuruFocus, GTx has a 5 of 10 financial strength rating with no debt and a cash-debt ratio that is ranked higher than 96% of the 964 companies in the global biotechnology industry. The company also has a 3 of 10 profitability and growth rating with an ROE of 814.56%, an ROA of 86.33% and EBITDA growth (three years) of -42.50%.
GuruFocus also gives GTx a 1-star predictability rating. Based on backtesting results, stocks with a 1-star predictability rating produce, on average, a 1.1% yearly return over a 10-year sample size.
Pyramid Peak may have decided it wanted to purchase shares in GTx because the company's market price has recently been gaining momentum. Since the beginning of the fourth quarter, GTx market price has gained an estimated 17.3%. The company also has no debt, it has a Beneish M-Score of -4.26 indicating it is not a manipulator of its financial statements, and it is currently trading below its intrinsic value according to the Peter Lynch Chart below.
Disclosure: Author does not own any shares of this company.
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