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KG position long JW

Thesis

The company has an excellent franchise in pain medications and is expected to recover its earnings and valuation despite current pressures from generic competition. With a pipeline of potential drugs nearing approval, the investment was made at a low multiple of demonstrated earnings, suggesting significant upside potential.

Did it work?

failed confidence: high

The stock has declined by 12% over the 28 months since the pitch, which contradicts the long thesis that anticipated recovery in earnings and valuation. Despite the company's strong franchise and potential drug pipeline, the negative price performance indicates that the expected recovery has not materialized, leading to a failed investment thesis.

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