Toshi (@Toshi-and-the-Mountain) su getquin

How to Invest in the rapidly growing ADHD market. $COLL (-2,73%) , a value stock with promising growth!

Collegium Pharmaceutical is a specialty pharmaceutical company that engages in the development and commercialization of medicines for pain management.

The company is not missing a beat. They are growing revenue quarter after quarter and I believe they are worth a second look. Let me give you some quick insights!

$COLL (-2,73%) has become part of Joel Greenblatt Magic Formula List in August 2023. Since then it has never graduated from the List even after the stock gained over 75%. This suggest that this stock is heavily undervalued. *You can find the updated Magic Formula list at the bottom of this post.

Recently, after going through an acquisition that impacted negatively the financials with one time items, the stock dropped significantly opening up new opportunities to buy in.

The new acquisition is very promising and will likely drive future growth. $COLL (-2,73%) bought Ironshore that had an established presence in neurology (ADHD) with Jornay PM. The ADHD market is projected to reach $30.6 billion by 2032.

Collegium reported strong Q3 2024 results, with 17% YoY revenue growth and EBIT margins improving to 35.2%, showcasing operational efficiency.

Still, $COLL (-2,73%) faces risks, including high financial debt, integration challenges for Jornay PM, and potential revenue concentration in pain management products.

At the same time, the management is executing very well on important areas:

Improving the health of the company by paying out debt;
Promoting a share repurchase program

I believe Collegium has compelling valuation metrics and good growth projections that indicate good upside potential.

In conclusion I think Collegium Pharmaceutical's earnings potential is at least as good as it seems, and maybe even better!

Considering all the above, I don't see many reasons against taking a position on this stock right now and holding it for one year as ruled by Joel Greenblatt.

Magic Formula's list (09/12/2024)