Hello to all.
I came across PLMD a few weeks ago on one of my screens, did a work-up for my stock club, we discussed it this morning and authorized it for an in-depth study.
I see two major and two potentially major concerns. I would be grateful for any insight on these from anybody here who's followed the company. Also, any advice on other concerns I should be worried about.
The SEC investigation seems to have been closed with no action. I take that as a good sign.
As to the major concerns:
1. The FBI investigation into Liberty Mutual is clearly of concern. I haven't found anything recent on this. Has there been any recent information on what's going on with it?
2. As to the business fundamentals, it appears that if diabetes testing machines that do not rely on finger pricks become accurate and available, PLMD stands to lose a major portion of their business. Since their financial health depends on repeat business, and diabetes testing supplies account for a substantial portion of their income, even a modest infiltration of non-invasive testing equipment into the market could do significant damage to PLMD. I'm not clear on the status of the development of such machines, whether FDA approval (I assume they need FDA approval) is expected any time soon. Any info on that?
The potentially major concerns:
1. Derivative shareholder lawsuits are a matter of routine for volatile stocks today, but if the FBI does bring criminal charges against PLMD and/or Liberty, those suits would presumably grow much longer legs.
2. The resignation of Lee was apparently unexpected, and therefore unsettling, coming as it does while an FBI investigation is ongoing. The press releases and announcements I've seen so far don't, IMO, adequately explain it or reassure me that it is a healthy development.
Those things said, our club is a long-term investment club, with an investment horizon of five years. So if the core business remains strong, and the issue I've mentioned (and any others that other people here can mention) are resolvable without serious damage to the company, this could be quite a buying opportunity.
Would be grateful for any insight anybody here could offer. |
