SS&C Technologies: Steady Dividend Growth With Potential M&A Upside (NASDAQ:SSNC)


We maintain our overweight rating on SS&C Technologies (SSNC), a company developing various software solutions for financial institutions. In our first coverage on the stock last December, we highlighted the company’s strong balance sheet and moat, driven by its presence in a high-barrier and low-switching cost financial industry market. Furthermore, DPS (Dividend Per Share) has also been growing steadily, even during the recent crisis. Against the challenging macro backdrop, SS&C will expect a bit of a slowdown in new sales for the full year. Nonetheless, some catalysts, such as more tuck-in M&As, cost-saving initiatives, and a resilient revenue stream, should allow SS&C to maintain its consistent growth and profitability profile.


SS&C beat its guidance in Q1 and also announced three tuck-in acquisitions, Vidado, Capita, and Innovest. As stated in the company’s presentation, the guidance for the full year has not yet incorporated the revenues from these newly acquired companies.

(Source: Company’s earnings call slide)

Considering that Capita and Innovest generated $42 million and $20 million of revenues in 2019, the full-year revenue should see at least an additional +$62 million upside. Therefore, we think that the revenue outlook for the full year should look even better than the guidance. Despite the lower guidance outlook, profitability for the full year also looks solid across all the recovery scenarios.

Net Income and EPS

(Source: Company’s earnings call slide)

Even under the worst-case scenario, in which SS&C will realize a ~$1 billion net income, the company will still maintain its earnings, EPS, and net margin figures from last year. Furthermore, SS&C can also reportedly take another $50 million to $70 million out of its cost structure, which, in addition to the lowering of its credit facilities’ LIBOR rates from 2.25% to 1.75%, should provide another profitability upside. Nonetheless, we believe that Q3 and Q4 recoveries should look more likely and conservative enough. In June, for instance, SS&C has continued landing key deals such as Mid Atlantic Group, which has chosen SS&C to automate its FINRA reporting.

Revenue Retention Rate

(Source: company’s earnings call slide)

As such, we also believe that SS&C is well-positioned to maintain its resilience during a challenging time. As per the management comment in Q1, the majority of SS&C revenues come from the recurring business, which has been less impacted by the crisis. The ~96% revenue retention rate has also been in line with the historical average, while SS&C’s strong cash flow generation and balance sheet should allow it to reduce its leverage and acquire new companies going forward. In Q1 alone, OCF (Operating Cash Flow) increased by 7.5% to ~$148 million. As the company should expect ~$1.25 billion of OCF for the full year, we think that other acquisitions may be on the map considering SS&C may now have enough room to lever up after paying down its debts. In Q1, SS&C finally completed +$2.1 billion of debt payments related to its takeover of DST Systems in 2018, which ended up reducing its secured net leverage ratio to 2.67x EBITDA.

Risk and Valuation

The lower rates environment is favorable to SS&C, given that it can lever up at a lower cost of capital to engage in potential M&As. However, we think that the situation will also be favorable to both its competitors or potential high-value targets, which should now have an easier time raising growth capital. With that in mind, we believe that key acquisitions will not be as straightforward as expected, despite the potential $5.8 billion dry powder.

SS&C Share Price YTD

(Source: Seeking Alpha)

SS&C share price has been under pressure in recent times, primarily due to the downward revision of the full-year revenue outlook to $4.5-4.6 billion from the previously $4.7 billion. The stock is currently trading at ~$55 per share, down ~20% from its YTD high, which we think presents a good entry point.

SS&C Dividend Growth

(Source: Seeking Alpha)

As we have discussed, SS&C remains a financial software giant with strong bottom line and cash flow profitability, both allowing the company to grow its dividend and acquire attractive M&A targets. SS&C has acquired companies like Intralinks and DST Systems, which provided a significant boost to revenue growth in the past. On the other hand, SS&C also maintains its $0.125 quarterly dividend payment even during the crisis. At ~3x P/S, the price is fair given the catalysts. We feel that the P/S can always retrace the ~4x-6x levels seen in recent times upon the DST System takeover, potentially once SS&C announces another key M&A deal down the line.

(Source: Stockrow)

On a more speculative note, SS&C remains in a good position to do another M&A this year given the $5.8 billion dry powder, though management has indicated that it will only selectively aim for one with a strong EBITDA in addition to revenue to ensure moving the needle on both ends. Conservatively, assuming SS&C can acquire an M&A target that allows it to maintain TTM growth at ~13% (higher than the previous FY 2020 guidance, but lower than the inorganic growth upon Intralinks, DST Systems, and EZE integrations), SS&C will be looking at a potential target with ~$600 million of revenue, which is a smaller business than either DST System or Intralinks. Furthermore, assuming the unchanged ~27x P/E, SS&C should then trade at a forward PEG of ~2x, making it equally attractive from this standpoint.

Disclosure: I am/we are long SSNC. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Enterprise Products Partners: Strong, Steady Shareholder Returns (NYSE:EPD)

Enterprise Products Partners (NYSE: EPD) is a respectable midstream company with a dividend yield of almost 10%. The company is one of the world’s largest midstream companies with a market capitalization of more than $40 billion. The recent difficulty that oil prices have faced over the past few days makes now a quality opportunity to invest in the midstream company.

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Enterprise Products Partners – InvestorHub

2020 Financial Outlook

Enterprise Products Partners is focused on generating strong cash flow for shareholders throughout 2020.

Enterprise Products Partners 2020 Financial Outlook – Enterprise Products Partners Investor Presentation

Enterprise Products Partners is still forecasting significant 2020 growth capital of roughly $2.7-2.8 billion. The company has deferred a significant $1 billion in expenses and is forecasting a continued decline in growth capital spending to $2.5 billion in 2021 and $1.5 billion in 2022. That decline in capital spending will support increased FCF.

The company is focused on an incredibly manageable 3.5x target area debt to normalized EBITDA ratio. At the same time, the company has increased its credit facility by $1 billion to maintain a massive $8 billion in total liquidity. The company’s total liquidity can enable it to continue and handle a downturn in the markets.

The company is focused on returning capital to investors. The company has a near double-digit dividend yield, which it is continuing to re-evaluate on a quarterly basis. We believe that the current market and the company’s financial position don’t warrant a dividend cut; however, it’s a risk worth keeping an eye out on.

Additionally, the company spent $140 million on 1Q 2020 buybacks and is considering more dependent on discretionary FCF. We would personally like to see the company expand its share buybacks, taking advantage of its interest rates to repurchase more shares. That would actually increase cash flow as it works to handle the oil collapse.

Capital Spending

Enterprise Products Partners is spending heavily on major capital projects which have significant potential.

Enterprise Products Partners Capital Spending – Enterprise Products Partners Investor Presentation

Enterprise Products Partners has $6.9 billion of major capital projects under construction. The company has cancelled or deferred spending on 13 projects; however, a substantial number of these contracts will still be completed in the immediate future. At the same time, the completion of these capital projects will result in growing cash flow.

Enterprise Products Partners is worth more than $40 billion and its near $7 billion in capital projects will result in a near 20% growth in cash flow. That alone will improve the company’s financial position significantly.

Financial Position

Enterprise Products Partners has a strong financial position, which, combined with its capital spending and outlook, will enable it to handle the worst of the oil collapse.

Enterprise Products Partners Financial Position – Enterprise Products Partners Investor Presentation

Enterprise Products Partners had $6.4 billion in liquidity in mid-March 2020, that it has since expanded to $8 billion. The company has significant cash on hand and is maintaining a strong leverage ratio despite the potential drop in the company’s adjusted EBITDA. The company’s liquidity will help keep it FCF-positive.

It’s also worth noting that Enterprise Products Partners is in a better position than most companies with a 49% CFFO payout ratio and billions in annual FCF. That FCF is incredibly significant, it’s money that the company can use towards paying back debt or anything else. However, it highlights the company’s financial position and ability to generate shareholder rewards through thick and thin.

Shareholder Returns

Enterprise Products Partners has a long history of shareholder returns and an even higher ability to generate FCF.

Enterprise Products Partners About To Put More Money In Your ...

Enterprise Products Partners Dividends – NASDAQ

Enterprise Products Partners has a long history of paying a respectable dividend even through difficult times. From 1999 through 2020, where we’ve had 4 major oil price collapses, (1999, 2008, 2014, and 2020), the company has managed to quadruple dividends. That’s a respectable but very sustainable roughly 7% growth in the company’s dividend annually.

Given the company’s current dividend of nearly 10%, those who invest today for the long run under the same growth could see an 80% yield on cost in 30 years. For the younger readers of Seeking Alpha, what a great way to bring up significant savings. It also shows that through thick and thin, Enterprise Products Partners has a significant history of shareholder rewards.

Enterprise Products Partners Outstanding Shares – Macro Trends

Enterprise Products Partners has seen its share price steadily increasing as the company has focused on small buybacks. The company has done a decent job of keeping outstanding shares constant, but it has still increased roughly 10% over the past 5 years. That’s a decently small increase, but it’s more than what we like to see.

We think that at Enterprise Products Partners, the company should be putting a lot more effort into buying back shares. However, the company’s overall commitment to shareholder rewards defined as dividends + annual % increase in shares outstanding is still impressive.


Enterprise Products Partners’ risk is harder to quantify. Specifically, it’s the risk of a much longer downturn in oil prices. The company’s cash flow is secure, with 86% fee-based cash flow, but only 4% commodity-based and 10% differential-based. That differential-based is important because it’s based heavily on final stage refining demand.

It’s hurt much more by a shutdown than it is by oil prices. However, being able to maintain 86% of cash flow as the company invests in growth projects highlights its strength. That cash flow is what the company will be able to use to support shareholder rewards.


Enterprise Products Partners has an impressive asset portfolio and an incredible ability to generate cash flow. The company is FCF-positive, a fairly high rarity at this time. Additionally, the company is FCF-positive after not only investing in maintenance but investing in growth. The company’s strong financial strength here, on top of a near double-digit dividend, highlights its strength.

We recommend taking advantage of current prices and making a sizeable investment. While there is some risk of a dividend cut, it’s fairly low overall. We’d like to see the company also investing more heavily in share buybacks at the time, given its ability to raise capital, but not doing so isn’t necessarily a downside.

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Disclosure: I am/we are long EPD. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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U.S. Oil Output Continues Its Steady Decline

By Ovi

All of the oil (C + C) production data for the US states comes from the EIAʼs Petroleum Supply Monthly (PSM). At the end, an analysis of three different EIA monthly reports is provided. The charts below are updated to March 2020 for the 10 largest US oil producing states, (Production > or close to 100 kb/d).

The June 1 update shows the continuous slow decline in oil output from US oil fields from November 2019 to March 2020. March output was 12,716 kb/d, down by 28 kb/d from February’s 12,744 kb/d. Also it should be noted that February’s output estimate from the EIA’s earlier May report, 12,833 kb/d, has been revised to 12,744 kb/d, a downward revision of 89 kb/d. The Red dot is the projected April output from the May Monthly Energy Review.

Above is a comparison of the EIA’s weekly production report with the EIA’s monthly report. Whenever this chart is posted, it receives many comments saying that they are just wild ass guesstimates. It looks like those comments have been correct since January.

However, it should be noted that February’s output estimate from the EIA’s May report, 12,833 kb/d, has also been revised to 12,744 kb/d, a downward revision of 89 kb/d. Even the EIA’s MER which came out on Tuesday 26th, four days before the EIA 914 report, had March’s output at 12,926 kb/d, a full 210 kb/d higher than this month’s output of 12,716 kb/d.

When comparing the estimates from the various EIA offices, the EIA PSM has the smallest error.

An indication of where US oil production is headed can be gleaned from the US weekly oil rig count. Data is provided by the weekly Baker Hughes rotary rig count report. From March 13 to May 29, 461 rigs were taken out of service, a drop of 67.5%. While in the last weeks of March and the first few weeks of April, the rig down was dropping by 50 to 60 each week, the drop in the week of May 29 had slowed to 15.

Prices for a barrel of WTI were reasonably stable for most of 2019 until early October. From early October to January, the price climbed from $52.64/b to its high on Jan 6 to $63.27. Prices began their precipitous drop after that and output slowly followed. While the price of WTI hit an official one day low of (negative) $- 37.63/b on April 20th, a more market realistic low of $10.01/b was reached the next day. As of May 29, 2020, the price of WTI had recovered to $35.23. Also the front month contango is currently in a more common range of 30¢ to 50¢ as opposed to the $3 and $4 when it was collapsing in March.

The 64k question now is: When will US production reach its low point? At what price will US production begin to recover from its steep plunge?

Ranking Production From US Oil States

Listed above are the 10 states with production previously greater than 100 kb/d. This month Utah fell below 100 kb/d again but will be retained for continuity. These 10 accounted for 10,362 kb/d (81.5%) of production out of a total US production of 12,716 kb/d in March 2020. US year-over-year production was less than 1,000 kb/d and will be like that going forward for many months. Note that of these 10 states, three still had gains in March, Texas, New Mexico and Wyoming. Only the top three had YOY gains.

Not shown in the table is the GOM which produced 1,932 kb/d in March and would rank between Texas and North Dakota.

Production in Texas increased by 67 kb/d to 5,422 kb/d in March. Note that the February estimate of 5400 kb/d from the April EIA report was revised down by 45 kb/d to 5,355 kb/d in the May report.

From March 13 to May 29, the Texas rig count dropped by 281 or 69%. An output drop will follow in April.

North Dakota’s oil production began dropping in October 2019 after peaking at 1,480 kb/d. However, it increased for one month in February only to decline again in March to 1,408 kb/d. The April estimate is based on Helms’ comments below.

According to this April 21 report “State Mineral Resources Director Lynn Helms told the North Dakota Industrial Commission some 5,000 wells have been shut down in recent weeks, accounting for about 300,000 barrels of lost oil daily. Helms estimated the state has lost up to 60,000 barrels of oil production in “the last 24 hours” as oil prices crashed and in what Gov. Doug Burgum has called a potential “economic Armageddon for North Dakota.”

Below is an interesting statement from that report. Can anyone verify the stated cost to restart a well?

“We know operators are going to have limited capital,” Burgum said. Helms said a well could cost $50,000 or more to bring it back online and producing.

5,000 x 50,000 = $250,000,000 is a lot of capex.

From the week of March 20 to May 29, the North Dakota rig count dropped by 38 or 76% to 12.

New Mexico was one of only three states to increase its production in March. Production was up by 9 kb/d to 1,105 kb/d.

In April the State land office issued an emergency rule allowing oil and gas companies to voluntarily shut in, or close, their wells without penalty, and regulators said many companies are doing so because they can’t ship their oil anywhere.

From March 13 to May 29, the New Mexico rig count dropped by 56 or 48%.

Oklahoma output rebounded in February after declining for four months in a row but resumed its decline in March. Output dropped by 5 kb/d to 552 kb/d. Peak output occurred in April 2019 at 613 kb/d.

Colorado production declined by 13 kb/d in March to 491 kb/d from 504 kb/d in February. Colorado production has dropped steadily since November 2019. The new environmental regulations are taking their toll on drilling activity and oil output.

Over the period November to March, the number of operating rigs dropped from 21 to 19. See chart below. However, over that same time, output fell by 72 kb/d or 12.8%. Seems like a large drop for such a small reduction in rigs.

From March 13 to May 29, the Colorado rig count dropped by 14 or 74% from 19 to 5.

Alaska production has started its annual summer decline. In March, production dropped 7 kb/d to 470 kb/d.

The Arctic Today is reporting that “ConocoPhillips, the state’s top oil producer, announced last week that it will cut North Slope production by 100,000 barrels per day, starting in late May.” Exploration well drilling is also being cut back due to CV-19.

The article contains this statement: “Production averaged 502,250 barrels per day in March and slipped to an average 490,252 barrels per day in April, according to the Alaska Department of Revenue.” This implies that NGPLs in March were 32 kb/d or 6.4% of all liquids.

California’s slow output decline has resumed. March production was down by 5 kb/d to 421 kb/d. Over the last three years, the average decline rate has been close to 21 kb/yr.

Wyoming increased production by 6 kb/d to 283 kb/d in March. During the week ending May 29, Wyoming had 2 oil rigs in operation, down from a high of 20 in January 2020.

Louisiana’s output has been in decline since August 2019. In March production was down by 1 kb/d to 114 kb/d. In January 2020, on average, 22 rigs were operating while there were 13 in the week of May 29.

After the low in June 2016, Utah production peaked in Sept 2018 at 109 kb/d. Since then, there has been an overall decline of 13 kb/d. March production was down by 1 kb/d to 96 kb/d.

GOM output keeps bumping up a production ceiling of 2,000 kb/d. In March output dropped by 42 kb/d to 1,932 kb/d.

Updating EIA’s Different Oil Growth Perspective

1) Drilling Productivity Report

The Drilling Productivity Report (DPR) uses recent data on the total number of drilling rigs in operation along with estimates of drilling productivity and estimated changes in production from existing oil wells to provide estimated changes in oil production for the five key tight oil regions.

Above is the total oil production from the 7 basins that the DPR tracks. Note that the DPR production includes both LTO oil and oil from conventional wells. Comparing the April and May projections, one can see that the estimates before May were revised up while May had a very large downward revision.

According to the May DPR report, LTO oil and conventional oil output peaked in November 2019 at 9,181 kb/d, revised up from the 9,062 kb/d estimate in the April report. The largest revision occurred to May’s output. May output is now expected to decline by 805 kb/d to 8,019 kb/d. The projected output in June is 7,822 kb/d. The contributions to the output decline from three major basins are shown below.

The Permian is expected to drop by 372 kb/d in May and a smaller drop of 87 kb/d is projected for June.

Bakken output dropped by 213 kb/d in May to 1,135 kb/d. June output is expected to be down by a smaller 21 kb/d to 1,114.

Eagle Ford’s May drop was 121 kb/d and June’s drop is projected to be 36 kb/d to 1,174 kb/d.

2) Light Tight Oil (LTO) Report

The LTO database only provides information on LTO production from seven tight oil basins and a few smaller ones.

The LTO only projects output to May 2020. Overall LTO output is only expected to drop by 176 kb/d from April to 7,904 kb/d in May.

Clearly, the almost linear increase in LTO output from the Permian basin has stopped. Production was flat in March and dropped by 45 kb/d in April to 4,084 kb/d.

3) Short Term Energy Outlook (STEO)

The STEO provides projections for the next 13-24 months for US C + C and NGPLs production. The May 2020 report presents EIA’s oil output projections out to December 2021.

The May STEO report has revised their April output projection down slightly from the earlier April report. The biggest revision is to March 2021 when output is revised down by a further 0.18 Mb/d and marks the end of the decline. The overall drop from January 2020 to January 2021 is projected to be 1.85 Mb/d.

Now that the price of WTI has moved closer to $35/b, it appears that the STEO March projection is closer to the late May price of $35/b than their May estimate, which was issued on May 12th when oil was $25.78/b.

World oil output dropped by 810 kb/d from 83,157 kb/d to 82,347 kb/d In February. Biggest decliners were Libya (630), Brazil (196) and Saudi Arabia (100). Biggest gainers were Norway (107), Iraq (100), Iran (55) and Guyana (52).

Since we have been staying home a lot more these days due to the pandemic, we have been doing more shelf cleaning. I came across this June 2004 National Geographic, which I distinctly remember keeping. Thought it contrasted perfectly with the situation we are in these days, supply glut and cheap gasoline. Stay safe, everyone.

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Editor’s Note: The summary bullets for this article were chosen by Seeking Alpha editors.

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Alphabet: Steady Growth Play Looks Fairly Valued – Alphabet Inc. (NASDAQ:GOOG)

Alphabet (GOOG) (NASDAQ:GOOGL) ended 2019 on a softer note than investors would like the company to end, yet the overall growth remains quite compelling. Given the size of the company, a near 20% growth rate is very impressive as the business is very profitable and is successfully branching out to adjacent markets. Given the strong positioning, Alphabet is a real leader with a strong moat, yet despite a near $200 per share net cash position, shares are trading at essentially 30 times earnings. This is a more than fair valuation despite the great growth and great growth track record.

Another Solid Year

Alphabet reported an 18% increase in full year revenues for 2019 to $161.9 billion, with fourth quarter revenue growth coming in at 17%. The company continues to provide greater financial detail on each of its segments, making it interesting and worthwhile to dig into the report. The core Google Search business generated $98.1 billion in annual sales, a healthy 15% increase from the year before.

Revenues from YouTube increased 36% to $15.1 billion, although growth slowed down to 31% in the final quarter of the year. The Google Network Member’s properties are a slow growing part of the business, with full year sales up less than 8% to $21.5 billion for the year. The ”other” category generated $17.0 billion in sales, which is an insane amount to classify as “other” of course. Google Bets remains a real long- term trajectory with sales up around 10% to $659 million, hardly making a dent into the operations of the company.

Cloud is the star performer next to YouTube. Cloud revenues rose 53% to $8.9 billion for all of 2019, as the company reported a similar growth rate for the final quarter of the year with revenues coming in at $10.4 billion on an annualized rate. With that division, we have now covered all parts of the company.

With the headcount up 20% to nearly 120,000 workers, indicating that the headcount is increasing faster than topline sales growth, Alphabet is experiencing some margin pressure. Nonetheless, reported earnings did improve as Alphabet was taking large charges last year in connection to the EC fine.

For 2019 the company reported GAAP earnings of $34.3 billion, or close to $50 per share, yet that is a bit too simplistic. While the company did incur a $1.7 billion fine in 2019, this is more or less offset by $5.4 billion in other income, although in part through net interest income on the formidable net cash balances of course, but we will discuss the realistic earnings power below.

About The Fortress

Following another strong year of earnings, Alphabet ended 2019 with $133 billion in cash, equivalents, marketable securities and non-marketable investments. With less than $5 billion in debt, this works down to a net cash position of around $128 billion, equivalent to more than $180 per share in net cash. With shares trading at $1,450 per share, this values the operating assets at around $1,270 per share. Excluding the nearly $5 billion in other income (comprised out of net interest income and mostly gains on other equity investments), more realistic earnings come in around $42-$44 per share. This implies that operating assets are valued at around 30 times earnings.

Of course this assumes that Alphabet will not squander the money, as it has been a good steward of capital in the past, not having made large value-destroying acquisitions, but so far has restrained from large share buybacks and dividends as well.

Hence, capital allocation remains a long-term issue, yet Alphabet has already made great improvements in its communication to investors, breaking up the revenue results across most of its divisions and activities, including in the most recent reporting, arguably driven by CFO Ruth Porat. It should furthermore be said that Alphabet has been a bit more aggressive in its buybacks, actually slightly reducing the share count and not just creating an anti-dilutive effect from stock-based compensation plans. Hence real progress is made in this area, something which the market is picking up on.

Remain Constructive, Miss Imminent Appeal

While a 30 times earnings multiple is very high, as a forward earnings yield of 3.5% looks compelling given the strong positioning and the level of interest rates at large.

I have long been a fan of Google as the company has for years been a reliable grower in a 15-25% range, has emerging properties and businesses, great attention span with its users, critical applications to users across the globe, and networks effects. Perhaps the biggest plus is that it is investing billions of dollars into loss making endeavors through so-called “other bets” as even partial success in these areas could have real positive implications, even for a firm the size of Alphabet.

Not so long ago one was able to buy Alphabet at an operating asset multiple in the high-teens or around 20 times earnings, more or less in line with the market while the company does not have leverage risk, but more importantly, is growing sales and earnings for years in a row around 20% per year. That proposition sounded very appealing to me, being able to buy such a great business with a strong moat at a multiple in line with the market and let the growth work for you, as shares have essentially doubled over the past three years. While I have enjoyed a great deal of the ride, I have cut the entire position after operating assets were valued above 25 times earnings.

At current levels shares trade at 30 times earnings which is steep, but perhaps not so weird as the 3.5% earnings yield is still compelling to the risk free rates, certainly in relation to growth still reported by the company. Nonetheless a great company does not automatically make for a compelling risk-reward in my eyes, at current levels.

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Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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The coronavirus is less deadly than SARS — the fatality rate has remained steady, but here’s why it could still rise

Two months into the epidemic, the coronavirus has not proven to be as deadly as the SARS virus. That, however, may also help explain why it’s spreading so quickly. It has an incubation period of up to two weeks, which enables the virus to spread through person-to-person contact.

The coronavirus, a pneumonia-causing illness that infects the respiratory tract, was responsible for over 300 deaths in China, and 14,557 infections, according to separate figures released by the Chinese National Health Commission on Saturday and the World Health Organization on Sunday.

A 44-year-old man in the Philippines was the first person to die outside China from the virus, health officials in that country announced Sunday; he was from Wuhan, China, believed to be the epicenter of the outbreak. That brings the total number of official fatalities to 305.

SARS, or severe acute respiratory syndrome, infected 8,096 people worldwide with approximately 774 official SARS-related deaths; most of those infections occurred during a nine-month period from 2002 to 2003. Even with 43 new fatalities reported over 24 hours, the fatality rate remains steady.

SARS had a fatality rate of 9.6% compared to coronavirus fatality rate of 2.1%, but that may change.

SARS had a fatality rate of 9.6% compared to the fatality rate of 2.1% for this new 2019-nCoV strain of coronavirus, which has remained steady for the last several weeks. However, that death toll could rise as the weeks progress, and drug companies scramble to come up with a vaccine for the virus. Whether the fatality rate remains steady has yet to be determined.

Assuming an incubation period of up to 14 days, with an average of 7 days, before a person presents with symptoms of the virus and succumbs to the illness within the first week of diagnosis, the current fatality rate may yet underestimate the eventual rate. The current fatality rate of 305 based on the total number of cases reported five days ago (4,600) equates to a fatality rate of closer to 6.7%.

If, on the other hand, the number of infections is as vastly underestimated, even more so than the fatality rate, that 2.1% coronavirus fatality rate could fall, which would be good news for those who have contracted the illness. (The World Health Organization has declared a global health emergency.)

Maciej Boni, an associate professor of biology, at Pennsylvania State University, said the 2009 H1N1 flu pandemic initially overestimated the final fatality rate, while the SARS fatality rate rose as the virus spread.

Boni wrote on the online science magazine LiveScience, “During the 2009 influenza pandemic, the earliest reports listed 59 deaths from approximately 850 suspected cases, which suggested an extremely high case fatality of 7%. However, the initially reported information of 850 cases was a gross underestimate. This was simply due to a much larger number of mild cases that did not report to any health system and were not counted.”

“After several months — when pandemic data had been collected from many countries experiencing an epidemic wave — the 2009 influenza turned out to be much milder than was thought in the initial weeks. Its case fatality was lower than 0.1% and in line with other known human influenza viruses,” he added.

But even that faality rate is smaller than the SARS fatality rate. The difference in these two fatality rates gives more context as to why the coronavirus has spread so quickly. Medical experts say an effective flu-like virus can extend its reach by not killing its host too rapidly and/or making the host sick enough to pass it on before finally becoming bedridden.

“Every now and then a disease becomes so dangerous that it kills the host,” Matan Shelomi, an entomologist and assistant professor at National Taiwan University, wrote on Quora in 2017. But, ideally for the host at least, it must strike a balance.

“If the disease is able to spread to another host before the first host dies, then it is not too lethal to exist. Evolution cannot make it less lethal so long as it can still spread,” he added. “If a hypothetical disease eradicates its only host, both will indeed go extinct.”

‘The strain of the Black Death plague (Yersinia pestis) from the 14th Century was too virulent and is now extinct.’

That, he said, is why the Black Death, which ravaged much of Europe and Asia in the Middle Ages is now extinct. “The strain of the Black Death plague (Yersinia pestis) from the 14th Century was too virulent and is now extinct,” with only modern, less devastating strains in existence.

Animals are useful for viruses to jump humans. “The animal is the disease reservoir,” Shelomi wrote. “Even if all humans were vaccinated against such a disease, we’d need to vaccinate the animal reservoir too in order to eradicate the disease, which is impractical if not impossible.”

Sean Beckmann, assistant professor of Biology at Stetson University in Florida who is an expert in zoonotic infections, which jumped from animals to humans, told the life-science website that there’s still a lot we don’t know about the new strain of coronavirus.

“It isn’t something that looks like it can hang out on surfaces or in the air for a long time and still be infectious,” he said. “It looks like it requires pretty close contact, which is why outside this epicenter in China we’re not seeing a lot of human-to-human transmissions.”

“This does not look like a virus that is able to stay alive in the air or on surfaces for a very long time. Which is good,” he added.

Other far more deadly viruses have taken more than half a century to become a global epidemic. For instance, it’s widely understood that HIV originated in Kinshasa in the Democratic Republic of Congo around 1920 when the virus crossed over from chimpanzees to humans.

“Up until the 1980s, we do not know how many people were infected with HIV or developed AIDS. HIV was unknown and transmission was not accompanied by noticeable signs or symptoms,” according to, a global information and education resource on the disease.

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HIV/AIDS has an incubation period of 40 to 60 days, although that can vary wildly. “The current epidemic started in the mid to late 1970s,” Avert said. “By 1980, HIV may have already spread to five continents. In this period, between 100,000 and 300,000 people could have already been infected.”

But the virus took hold in the years following the sexual revolution, with the first reported cases in the U.S. among gay men in 1981 and intravenous drug users. Untreated, it has a fatality rate of almost 100%. To date, 75 million people have contracted HIV with an estimated 32 million deaths.

Like HIV, the coronavirus has created its own brand of fear and loathing. Rumors about whether it began in a food market in Wuhan have led to allegations of racism against Chinese people in Canada, the U.K., Malaysia and South Korea, and elsewhere, and xenophobic comments online.

Chinese President Xi Jinping told the World Health Organization head Tedros Adhanom Ghebreyesus this week, “Chinese people are currently engaged in a serious struggle against an epidemic of a new type of coronavirus infection. The epidemic is a demon, and we cannot let this demon hide.”

Other deadly viruses have taken more than half a century to become a global epidemic.

However, reports that more than half-a-dozen doctors first discussed the threat of a potential coronavirus outbreak in early December only to be silenced by the local Communist Party has led critics to speculate that more could have been done after the first diagnosis.

Yaxue Cao, founder and editor of the political pressure group, said a Wuhan doctor said in a WeChat group in late December that there were “7 cases of SARS connected to the seafood market.” He was then scolded by the party disciplinary office, and forced to retract that, Cao said.

“From the same report, we learned that Wuhan health authorities were having overnight meetings about the new ‘SARS’ at end of December,” Cao posted on Twitter Jan. 27. “Earlier today the Wuhan mayor said he was not ‘authorized’ to publicize the epidemic until Jan. 20.”

Wuhan mayor Zhou Xianwang said 5 million people had left the city before travel restrictions were imposed ahead of the Chinese New Year. Ma Xiaowei, the director of China’s National Health Commission, said that the virus had an incubation period of 10 to 14 days.

China has taken major steps to help prevent the spread of the virus. Officials in Wuhan, a city of 11 million residents that is widely regarded as the epicenter of the illness, last week closed the area’s outgoing airport and railway stations and suspended all public transport.

Chinese officials have since expanded that travel ban to 16 surrounding cities with a combined population of more than 50 million people, including Huanggang, a neighboring city to Wuhan with 7.5 million people, effectively putting those cities on lock down.

Beckman also told that efforts to contain coronavirus happen in three stages: “You get containment and trying to reduce the spread as much as possible. You get the development of symptomatic treatment, things like antivirals. And the third one, and the more long-term process, is vaccine development. And that’s because vaccine development takes quite a bit of time.”

The Centers for Disease Control and Prevention last week confirmed the first case of person-to-person spread of coronavirus in Illinois. There were nine confirmed cases of coronavirus in the U.S. as of Sunday, according to the Centers for Disease Control and Prevention, and state health officials. The latest case was announced Sunday by health officials in California.

According to figures provided by the Centers for Disease Control and Prevention, there are confirmed cases in 26 countries or territories in addition to China and Hong Kong, including Germany, Japan, Vietnam, and the U.S., the U.K. and Russia.

On Saturday, New York City health officials said a patient there was being tested for coronavirus. They sent the samples to the CDC, but said they did not expect results for another 36 to 48 hours, maybe even longer. The patient recently returned from China, is under 40, and is in a stable condition at Bellevue Hospital, he New York City Department of Health and Mental Hygiene said.

The Wall Street Journal reported that some families have voiced their concern and frustration that their relatives’ cause of death was marked as “severe pneumonia” or “viral pneumonia” on their death certificates. But the number of infections may also be underestimated.

So will the latest coronavirus outbreak be more similar to the 2002-2003 SARS outbreak or the 2009 H1N1 influence pandemic? Boni wrote on LiveScience: “I am a professor of biology who studies the evolution and epidemiology of infectious disease, and in my view, in late January 2020, we do not yet have enough solid evidence to answer this question.”

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