Sirtex Medical Sees Market Or Merger Gains

Every New York stock exchange trading day I'm posting a daily dividend stock or fund review. I'll share the three chief qualities of just one equity or fund that could be selected for a dividend stock portfolio I've named the Safari to Sweet Success.

This week my Safari portfolio seeks a company in the healthcare sector. 

That sector includes ten industries all related to testing, diagnosing and treating what ails us. The healthcare industries are: biotechnology; diagnostics & research; drug manufacturers - major; drug manufacturers - specialty & generic; healthcare plans; long-term care facilities; medical care; medical devices, medical distribution; medical supplies.

Today I'm reviewing a biotechnology company named Sirtex Medical Limited. Its trading ticker symbol is SXMDF

Sirtex Medical Limited is an Australian oncology-focused medical device company. The company offers a novel embolic radiation therapy device called SIR-Spheres microspheres used in targeted radiation therapy for treatment of liver tumors.

The company is headquartered in North Sydney, Australia. And its sale to Varian as agreed in January is pending,

I use three primary keys to gauge dividend equities or funds like Sirtex Medical Limited (SXMDF): 

(1) Price

(2) Dividends

(3) Returns

Those three primary keys, however, best tell whether a company has made, is making, and will make money. 

SXMDF Price

Sirtex Medical's price at yesterday's market close was $21.66 per share. A year ago its price was $11.60. So it gained$10.06 per share in the past year.No doubt bolstered by the tender offer of purchase by Varian. The sale is subject to shareholder approval, so no closing date is yet known.

If SXMDF does as well this coming year its value will increase from $21.66 to $31.72, or about 46%. The Varian Offer valued shares at $28.06. or up 29.5%

SXMDF Dividends

Sirtex Medical's most recent annual dividend was $0.24 declared August 12th and paid October 18th.  

The annual dividend for 2018 is estimated to be $0.24 payable annually in September.

The yield from that $0.24 annual dividend was over 1.1% at yesterday's $21.66 price.

Any Gains For SXMDF?

Adding the $0.24 dividend to the hypothetical $10.06 estimated year over year price gain shows a potential $10.30 gross gain for the coming year.  

Subtract the cost to trade Sirtex Medical's (SXMDF) shares: A$1,000.00 investment at Friday's $21.66 price bought 46 shares. 

Those 46 shares get hit with broker fees of $5 at purchase and another $5 at sale for a per share cost of about $0.22 per share

Subtract that $0.22 brokerage cost from the estimated $10.30 gross gain leaves a net gain to 2019 of $10.08 X 46 shares = $463.68 or a 46.5% net gain on a $996.36 investment.

Therefore, Sirtex Medical Limited(whose ticker symbol is SXMDF), now shows a possible 46.5% gain by my simple year over year calculation with a 1.1% dividend included. (Which is below the 3.5% standard dividend for my Safari portfolio.) Or the current premium to projected sale pice per share to Virtex comes in at 29.5%

No analysts cover this stock but the ten-year price chart I saw showed mostly peak price gains in late 2015.

These forward-looking numbers are conjecture based on past year performance. The actual results remain to be seen. They could turn out to be far lower. More study is required for you to determine if Sirtex Medical Limited (SXMDF) is worth your time and money.

Disclosure: Graphs and charts were compiled by Rydlun & Co., LLC from data derived from www.ycharts.com &  more

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