Good post from IV MB:
Msg: 170 of 170 5/16/2008 9:41:55 AM
Author: plotinus4me Strong Buy
Thoughts on the CC 5/15/08 I posted this earlier on the Yahoo MB.
was very pleased with the CC. While I had hoped to get some info on the revenue
and profit projections near and longer term, all of my other questions were answered.
Also, I think many of the questions and concerns of the MB posters were
discussed and answered. I have asked Mr. Critchfield to provide a transcript as
there was a lot of info provided and so when future discussions occur we will
have a reference.
My thoughts on what came out of the CC are:
1. That it is going to take the rest of this year to develop physician interest in
AW. There are several major publications expected later in the year which
should be influential. It sounds like Randox will be helpful in the foreign
markets and, apparently, in some areas of the U.S. market.
2. As we have known, the AW market is huge with 60 million in the U.S. and
200 million world-wide who will be eligible to take the AW test. But it is
taking longer to get recognition than previously indicated. So, it doesn't
look to me like any major contribution by AW over the next 2-3 quarters.
3. AA is projected to be a smaller market than had previously been indicated
in a past PR and in my discussions with IR. This product also will take
time to develop but should be a major contributor to revenues and profits
in the future.
4. It looks like the contract mfg business will be not significant going out.
While they will try to get some business, it sounds like the emphasis
will be on AW and AA.
5. Thus, it looks like growth for the next 2-3 quarters will come from other
products which have been growing at about 20% year to year. Anything
else will be an addition to this growth. Costs have been kept under
control and this seems to be a priority for management. Also, interest
expense is expected to decline.
Conclusions and share price projections:
Revenues are indicated by guidance to be flat this quarter. I would expect
a 10 -20% revenue growth for the following 2-3 quarters based on a minor
contribution from AW and AA. As we go forward, we should get more
guidance on the progress of AW and AA to better develop a revenue model.
I do not expect much in the way of cash burn nor do I expect to see any
new financing unless there is an acquisition.
The stock price should be in a range from its current level of @.25 to .50 over
the next 6 months. This does not reflect anything other than a modest pickup
in revenues nor any negative surprises. One could get several runs up and
down during this period as various updates are provided or as the Market
Makers decide to make it so. Catching a part of this range would make for
some nice profits over the period. So one should look to trade the stock for
the next 6 months. However, one should keep some shares in the portfolio as
this company could develop faster than has been indicated during this period. |
