We're starting to see a fuller calendar with six deals in active marketing and many more gearing up to be added. This week, we have Smithfield Foods $SFD, Beta Bionics $BBNX, Infinity Natural Resources $INR, and Metsera $MTSR.
Smithfield Foods $SFD is the big one at a $10B market cap. It's also a spinoff from China's WH Group. The story is simple - fewer low-margin hogs and more higher-margin packaged products like bacon and lunch meat. The big question for investors is whether Smithfield can "price like Tyson and trade like Hormel?" Hormel $HML trades at 1.6x EV/S and a 2,x PE, while Tyson $TSN trades at 0.5x EV/S and a 16x PE. At the $25 mid-point, SFD would be at 0.8x sales, so not quite as cheap as Tyson, but then again; they don't have bird flu risk. It's not a deal I'd be interested in unless it gets below the current range. The yield will be good, which can put a floor on the stock. I
Instead of SFD, I'd buy Papa John's $PZZA here for an easy 1 year double.
Beta Bionics $BBNX has an automated insulin delivery device cleared by the FDA in 2023 for Type 1 Diabetes. It's a better solution than many alternatives, but it's not yet the "holy grail" for this condition. The deal should be OK with good institutional support, but it's only good enough for "watch list" status.
Infinity Natural Resource $INR is another US oil and natural gas producer. They have some advantages regarding efficiency and generating higher returns from declining yields from existing fields. INR is very profitable and is coming at a 10x PE at the mid-point of the $18-21 range. The issue INR, Venture Global $VG and other natural gas companies is that investors don't believe in the sustainability of strong sector economics. INR has a good balance of oil and natural gas production, capital efficiency. If it gets cheap enough, it could be compelling.
Metsera $MTSR is a biotech developing new obesity drugs like a once-a-month GLP-1 injection and an oral GLP-1. They do more than that but investors are likely to focus on the GLP-1 aspects. Their MET-0971 looks to be twice as long acting as existing popular formulations and would support monthly injections. The oral formulation promises better bioavailability and effectiveness. More data on both will be coming over the course of 2025. This is a hyper-competitive market and we've already seen severe price competition but these formulations will still be valuable. Metsera is still in Phase 2 with 0971 so will be pre-revenue at least through 2026. The market cap at the $16 mid-point is $1.7B.
There are some other dogs and cats on the docket for this week like RedCloud $RCT, Cortingent $CRGT, HW Electro $HWEP, iOThree $IOTR and Wellgistics Health $WGRX.
