In business school, you’ll learn several methods to determine the value of stock, usually based on metrics like earnings, cash flow or dividends.
Of course, the actual stock market doesn’t work that way. The price of a stock often is determined by speculation about the future, rather than actual financial data.
So it shouldn’t be surprising that the best performing Jacksonville-based stock in the first half of the year comes from a company with absolutely no revenue, and no real certainty about when it may begin selling anything.
TapImmune Inc., which has been developing immunotherapy treatments for cancer, jumped 139 percent in the first six months of this year.
All of the gain came after the company agreed to merge with another pharmaceutical development company that also has no products on the market, Marker Therapeutics Inc.
TapImmune’s stock actually was lower for the year when that merger was announced May 15, but the stock has tripled in price since the announcement as investors speculate about the potential cancer treatments that could come from the company.
TapImmune moved its small headquarters office from Seattle to Jacksonville in 2015 when it began trials of a breast cancer treatment at the Mayo Clinic.
Although it still is a development-stage company, its relationships with Mayo and other major cancer researchers, including the Memorial Sloan Kettering Cancer Center in New York and pharmaceutical firm AstraZeneca, gave TapImmune credibility.
Similarly, Minnesota-based Marker has a relationship with the Baylor College of Medicine in Houston. Investors are betting that the two companies with strong ties to cancer researchers have a good chance of developing profitable therapies.
The merged company, which will operate under a so-far unannounced new name, will be headquartered in Houston near the Baylor center.
ParkerVision stock down 38 percent
At the other end of the scale for Jacksonville companies is another firm that often has reported no quarterly revenue, but ironically did begin to report sales in the last two quarters.
Wireless technology developer ParkerVision Inc. began marketing its in-home Wi-Fi product called Milo last fall, but early sales have not lived up to investor expectations. In fact, first-quarter sales were lower than the fourth quarter of 2017.
ParkerVision’s stock fell 38 percent in the first half of this year.
JinkoSolar optimistic about solar markets
JinkoSolar Holding Co. Ltd. last week reported lower first-quarter earnings amid concerns that political decisions in China and the U.S. could affect the markets for its solar panels.
However, officials of China-based JinkoSolar, which plans to open a solar panel plant in Jacksonville in the fall, expressed optimism about its markets.
“The U.S. market continued to show strong vitality and a great potential despite the impact from Paris. The only uncertainty is the potential escalation of trade wars,” said Gener Miao, vice president of global sales and marketing, in the company’s conference call.
Investors have been concerned that U.S. demand for solar panels would decline after President Trump withdrew the U.S. from the Paris climate agreement last year.
Miao said the U.S. market is “realistically stable” and “our manufacturing facility in Florida is expected to begin delivering product in the second half of the year.”
JinkoSolar’s outlook in its home country was clouded a month ago by China’s decision to cut subsidies for solar projects and suspend construction of new solar farms.
“Despite the strong initial reaction to the new policies, we remain optimistic about the demand of the Chinese market for the full year 2018,” CEO Kangping Chen said in JinkoSolar’s earnings release.
“We believe the Chinese government’s new policies to have relatively limited impact on our operations over the short term, and we remain confident in our future business prospects and the long-term growth of the industry overall,” he said.
JinkoSolar reported sales in the first quarter dropped 28 percent to $728 million, and adjusted earnings fell from 36 cents a share in the first quarter of 2017 to 5 cents this year.
Roth Capital Partners analyst Philip Shen had downgraded JinkoSolar to “sell” a month ago because of the new policies from China. Despite the low first-quarter earnings, he heard enough from the company last week to upgrade his rating back to “neutral.”
“JinkoSolar may be better-positioned to navigate a challenging market than we previously thought,” Shen said in his research note.
“JinkoSolar may be able to maintain shipment volumes with support from growing demand in emerging markets and margins could actually improve as a result of lower supply chain costs.”
The company has an agreement in place to ship solar panels made in Jacksonville to NextEra Energy, and Shen said its contracts like that with “long-term, stable utilities” are a plus.
“Our upgrade to Neutral reflects the company’s increased overseas diversification and ability to maintain the integrity of company contracts,” he said.
Competing plans in court for artifacts from the Titanic
Two years after the owner of artifacts from the RMS Titanic filed for Chapter 11 bankruptcy reorganization, the case continues in U.S. Bankruptcy Court in Jacksonville with two competing plans to resolve it.
Premier Exhibitions Inc., owner of 5,500 artifacts from the famed ocean liner that sank in 1912, had hoped to resolve the case by auctioning off its assets in February. But that auction was canceled.
With Premier’s exclusivity period to file a reorganization plan expired, a committee of stockholders of the publicly traded company filed its own plan last month to establish a liquidating trust to sell off the assets.
But Premier followed by submitting an agreement to sell its assets for $17.5 million, subject to potentially higher bids coming in at auction.
Both the equity committee’s restructuring plan and the company’s plan for a sale will be heard at a hearing July 25 in U.S. Bankruptcy Court in Jacksonville.
In a disclosure statement filed with its plan, the equity committee said it is asking for the liquidating trust “in order to bring these cases to a conclusion in a manner that the equity committee believes is in the best interest of the debtors, their estates and all having an interest in them.”
In a filing for its proposed sale, Premier said “the debtors and their professionals have been unwavering in their pursuit of a viable sale process which would yield the highest and best return for the benefit of the debtors’ estates.”
Based on its “substantial” marketing efforts, Premier said the proposed sale “represents the highest and best offer from a potential buyer with the demonstrated financial ability to expeditiously close the transaction.”
Premier is headquartered in Atlanta but it filed for Chapter 11 reorganization in June 2016 in Jacksonville because the company and some of its subsidiaries are incorporated in Florida.
Premier’s stock continues to trade in the OTC markets, with the price dropping from near $5 in January to close to $1 recently.
Rayonier AM’s lignin plant opens
LignoTech Florida, a joint venture of Jacksonville-based Rayonier Advanced Materials Inc. and Norway-based Borregaard ASA, officially opened its lignin plant in Fernandina Beach last week.
The companies announced the joint venture in June 2015, with Rayonier AM owning 45 percent and Borregaard owning 55 percent. The companies said it would create 50 jobs when opened.
In a news release, Rayonier AM Chief Executive Paul Boynton said the plant opened on time and within its $110 million budget.
Rayonier AM said the plant will process lignin, a natural component of wood, “into value-added products that provide environmentally-friendly alternatives to fossil fuel-based products used globally in construction, agriculture and other industrial applications.”