ELN- Mike, as I recall you follow these drug companies. What do you think about ELN at this level. Reason I got in this am was because of this article I read last week. I thought $20 would provide mental floor and that's why I set my stop just below. Was I wrong! Anyway I'm still intrigued that earnings and growth still show good value at this level. Now just got to wait for the knife to hit the floor. Here is the excerpt from the article I mentioned.
Elan
Like Tyco, Elan ELN has been accused of aggressive accounting, and like Tyco, Elan has received a clean bill of health from the SEC. Although Elan claims to have ceased some of its more-aggressive practices, it seems to me that Elan is following the letter of the accounting rules while making light of their spirit. That's one reason I have to cast a skeptical eye at the books. And since the books are only fully reported under U.S. accounting rules once per year (Elan is an Irish company), that skeptical eye becomes even more so.
It's worth noting that Elan is no Enron -- it's got real products with solid prospects, and so at some price the share would be worth a look, I think. Our recently revised Analyst Report on Elan shows that if you take management's top-line growth estimates and slash them in half, and significantly penalize the company's margins as well, the shares are worth about $33. With the stock in the high $20s, that's not a big enough margin of safety for me given the company's aggressive -- though legal -- accounting practices. If the stock dropped to the low $20s, I might be inclined to take another look.<<<
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Joe |
