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Biotech / Medical : New Brunswick Scientific Co., Inc. (NBSC)
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To: scaram(o)uche who wrote (68)7/21/2000 12:52:03 PM
From: tuck   of 724
 
Rick,

Speaking personally, I like the first way, by way of the DGI reverse merger into shell scenario. You and I both know one that's available. <g>

I think the cash could be a short term problem. It is unknown how much of the credit facility is being used and what exactly the related expenses are. Thus the 2Q upside suggested in the last 10-Q (inventories high then because they expected a big second quarter after 1Q snafu) could be trimmed by higher than expected interest expense. On the bright side, cash flow should be improved mightily almost no matter what happens, at least for a quarter. But I think this is priced in.

It seems to me the stock has started an earnings anticipation run and may sell off when it actually reports even if it hits expectations. If higher than expected interest expense causes a miss, NBSC could reverse pretty sharply. If so, that may be my entry point.

Because despite all of the above, I concur with your take that just about any deal/positive surprise should provide a boost, and that it is indeed undervalued by many metrics. Last Q's bump likely has kept it off may people's stock screens, and it's a little more complicated than your average picks and shovels play. Thus the small following. Classic value play setup.

Thanks for your many thoughts here.

Cheers, Tuck
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