Bentley Pharmaceuticals (BNT) represents an interesting opportunity from both a value and a growth perspective. The Company manufactures and sells a variety of established pharmaceutical products.
The Value Play: BNT just raised $9.8 million in cash through the exercise of warrants. With 8.4 million shares outstanding, the Company has well over $1 per share in cash and a strong balance sheet. BNT has one of the lowest price/sales ratios in the industry. The stock closed yesterday at 2 3/8, giving BNT a valuation of about 1.1 times revenues. (And, considering the cash on hand, you are really paying substantially less for the current operations.)
The Growth Play: The company has projected that revenues will double in the upcoming year. Last year, BNT sold a low margin French subsidiary, and then signed a letter of intent to acquire a higher margin operation with a portfolio of branded gastrointestinal products. Company executives have stated that they will move away from basic research to devote time and efforts to established, higher margin products that will provide immediate shareholder value.
The combination of low valuation, strong balance sheet, possibility of substantial growth, proper focus of the new management team, and end of the tax selling season makes this one look good to me. Comments? |
