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Biotech / Medical : Isolyser (OREX)- Any comments
OREX 0.223-34.4%Apr 3 5:00 PM EST

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To: Sandy who wrote (496)7/10/1997 11:42:00 AM
From: W. Kent Ward   of 617
 
Sandy, if Isolyser's sales of its other products are increasingly greater than its cost of sales and operating expenses and therefore sufficient to drive earnings per share (EPS) growth, OREX stock value should justify itself and grow similarly. Obviously, that is the fundamental and primary objective that management must achieve to grow shareholder value. In my opinion, EPS needs to become positive at a sufficient growth rate to reach an annual "run rate" of at least $.15 to $.20 in next 12 months to justify today's value on a fundamental basis (i.e. a PE of ~20-25). If EPS growth perception is higher, momentum players will drive the PE multiple higher and thus the market value per share. If the latter happens, we will see spikes similar to the last few days, but based on more tangible news that this recent PR implies. On the other hand, if EPS languishes and no EPS growth is perceived in a reasonable timeframe, stock price will go down from today's levels. Lots of contingencies... hope this is of help.
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