KV Pharma – Closed

We sold out of our investment in KV Pharma. Although we still believe the company is undervalued and will appreciate once it fixes the FDA issues, there are many investment opportunities that have a better risk/reward scenarios.

We took the proceeds from this investment and purchased more Caraco shares. We believe Caraco’s FDA issues will be fixed much sooner than KV Pharma and that the Caraco valuation will adjust once these issues are resolved.

2 responses to “KV Pharma – Closed”

  1. May i know what are your views on KV.a now?

    they are currently trading below 1.50 and would possiblily resume shipment of their products in Q4 2010.

    Do u think its a good buy now?

    • I would stay away from it. I have been watching it and the drop in the share price is tempting. Although thinking about the worst case, if production is delayed then the company will have additional cash problems and will have to sell more of its assets. Currently the company will run out of almost all its cash by end of Q2. They have to sell an asset and they won’t get a good price in distressed sale.

      KV could be a big winner but the risk is too high, for my liking. With the recent drop in the market, I think there are better safe opportunities in the market.

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