Royalty Knockout #12
Altius vs Royalty Pharma
Royalty Pharma and Altius were covered before.
Royalty Knockout Match #2
Vizla Royalty (VROY) is set to be taken out by Elemental Royalty, another company in the contest.
Royalty Knockout #3
Royalty Pharma (RPRX) is the king of pharma royalties. The knock on RPRX for a knockout competition is its very success. At $33 billion in market capitalization, RPRX has grown into an industry behem…
Similar to the prior matchup, it’s pharma versus a fairly valued maturing royalty portfolio. The main difference is the two firms have shifted in size. WPM was the royalty giant vs smaller LGND. This time Altius is the royalty emerging from its junior stage and Royalty Pharma is the large-cap. The ratios were even fairly similar with WPM about 10x the size of LGND. RPRX is about 12x the size of ALS, ATUSF.
There’s even a similar chart setup. ALS is in the middle of a major run, as is WPM.
RPRX doesn’t have a long history, but it is also in the middle of a bull run.
ALS would be a superb buy at $25 a share, but that would require retracing the entire rally. At that price, a 10x would be a stretch, but not a wild stretch. From here, Altius needs commodities prices to rally across the board.
Altius doesn’t have individual royalties that will drive the firm and neither does Royalty Pharma. What RPRX does have is more cash flow and a better valuation with a PEG closer to 1 if the optimistic earnings forecasts come. As with the prior matchup, if one is absolutely bullish commodities, then of course Altius will benefit. If instead the scenario is more middle of the road, RPRX has a better valuation and stronger cash flow. Same caveat with the WPM and LGND matchup too. Stagflation probably wrecks financialized assets, but commodities would likely outperform in that scenario. In a recession where government healthcare spending holds up, pharma royalties remain cash cow and commodities prices could tumble.
RPRX wins in another squeaker.