Some cautions, good Threaders, and some responses:
Quigley has run into trouble of late; here is an excerpt from Motley Fool's analysis:
Quigley is selling a single product that is cheap to produce, but at a hefty premium that cold suffering patrons are willing to pay. That is why the margins have been so strong. But now Cold-Eeze is battling Halls Zinc Defense, which usually retail for $5.99 a bag, with dueling promotional discounts. Cold-Eeze must remain sharp because while it had an 8-to-1 lead over Zinc Defense back in October, that has been trimmed to a mere 4-to-1 advantage recently.
Quigley's patent prohibits an exact knock-off, and the Halls product is simply a zinc acetate, but the similarities have blurred consumers to the point that if either one decided to cut prices permanently, the other would probably have to follow suit and the margins would obviously contract for both parties.
That is why one of the fastest growing companies of last year is selling for just 8 times trailing earnings today. Despite the move to international distribution, with globetrotting deals in place for a Merck (NYSE:MRK - news) subsidiary to distribute Cold-Eeze in Canada and a foray into China inked just last week, domestic concerns weigh heavy.
But now Quigley is trying to market its zinc lozenge as an allergy reliever. If successful, it should eeze the company's burden of being not only a one-product company, but also a seasonal one at that.
Paracelsian is not envisioned as a one-product company -- here the significance of the TCM library. And of course there is the ongoing business of BioFIT certification. And there's this difference: Quigley is on its own; an alliance with Nature's Way -- assuming one is consummated -- provides a measure of protection.
The mind drifts while waiting for real news.
Jonathan |
