Cents and Sensibility - Kimberly and Friends' Consortium Message Board

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Strategies & Market Trends : Cents and Sensibility - Kimberly and Friends' Consortium

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To: Marshall001 who wrote (101095)	4/27/2000 11:39:00 PM
From: westpacific	Read Replies (2) of 108040

PBSC - this is below offering price, talk about a steal!!!!! Life Sciences analytic instruments & services This firm represents a good example of what is known in finance as the ?Agency Problem?. It combines 2 relatively unrelated businesses, expected to appeal to different investors. Separately, both would be worth more than when combined. In this case, a life science instrumentation business is combined with a radioactivity detection and remediation business. The firm?s analytic instrumentation business is very attractive. They apply advanced computer and genomic technology to produce miniaturized, automated, and high throughput analytic instruments. The firm also sells the consumable supplies needed to conduct analyses, so it has a continuing revenue stream from each initial sale. It has more than 50 patents and customers include many of the largest pharmaceutical and biotech firms in the world. There is an installed base of 15,000 units which in ?99 represented revenues of $159 million (60% of the firm). The firm is also in the radioactivity detection and remediation business. It is the only firm qualified by the Dept. of Energy (DoE) to conduct nuclear waste analyses for the national Waste Isolation Pilot Project. The firm is now entering the nuclear environmental remediation business, with aims at a portion of the DoE?s $6.3 billion nuclear weapons site remediation project. Overall performance has been moderate. Between ?98-?99 revenues grew at a 16.1% rate, reaching $265 million. The firm recorded a 45.8% gross margin, a 10.9% operating margin, positive cash flows, and a breakeven net margin. Fundamentals are adequate in this case. The concern is the magnitude and direction of further growth opportunities. The unrelated businesses appear to be impairing overall performance.

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