Brad,
Let me state up front, I have a large portion of my stock portfolio invested in PM so therefore, I have a vested interest in their success. But the following are the reasons that I think PM is worth the investment at these prices:
1. They have a book value of over $5.50 , so with this weeks price apprciation they are only selling at 2X book value.
2. They have a cash position of between $13 and $15 million dollars. Not bad for a company with a market cap under $100M.
3. They have the management expertise with a new Marketing VP from Ciba Geigy, a new board member from The Gillette Company. The Chairman and CEO appears to have an excellent grasp of the future for the company by divesting of ancillary operations and maintaining the core components and expanding the diabetic market.
4. They have a dominate position with their suppliers therefore making it hard for an upstart to have their buying power. Currently PM is the #1 mail order supplier for diabetic products and this is shown by their #1 purchasing status of Johnson % Johnson's Lifescan glucose monitoring devices.
5. With their cash position they are spending over $10M annually on a national TV campaign. I personally think this is the reason that their customer base has tripled in the past year.
6. PM has in place the staff, the distribution system and systems to handle the volume of new customers.
7. PM is not a one product/service company.They also hold a leading position in the over-the-counter market for urinary health products, distribute a broad range of other medical products, including digital thermometers and compliance products, primarily to food and drug retailers and mass merchandisers nationwide. They also market, manufacture and distribute a line of prescription urological and suppository products.For example, they hold the #1 position with private-label and number 2 overall position in digital thermometers and they have just added a unique flexible-tip digital themometer that offers a flexible, flat tip design.(I bought one of these for myself and family).
Brad, these are just a few of the reasons I like PM.There are three small brokerage houses that follow PM and even their numbers are outdated as they were assuming that they would have a customer base of 70,000 by the end of 1999 fiscal year and they have over 60,000 with another 3 months to go in fiscal 1998. You might want to follow PM on a thread I've started under the title: The Stock for 1998(PolyMedica) You can find it under PM on Silicon Investor.
Keep tuned for earnings on the 20 or 21st. |
