CTEC: Cholestech any other investors? Message Board

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Biotech / Medical : CTEC: Cholestech any other investors?

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To: Duane L. Olson who wrote (496)	4/9/1998 8:25:00 PM
From: mike boyajian	Read Replies (2) of 710

Duane, I couldn't agree with you more. This is my opinion that I posted on the Yahoo board on 31 MAR 98--post #187 "Base on current revenue and earnings growth rates this stock has a very high side potential. FY 98 .18, FY 99 .46. At this acceleration in earnings growth would FY 00 be 1.00 EPS? At an average PE of 28 for MED Instruments and 40 for MED Products (CTEC seems to switch between categories and similar devices are in MED Products category ie. STAT) CTEC would still be trading at a high PE if sustaining the current revenue and growth rates. The market is forward looking by six to twelve months--in other words the market adjusts current stock prices to reflect anticipated future earnings and growth rates. CTEC has a PE of around 157 but this is very misleading as it is based on trailing twelve months (TTM) earnings. Once earnings are released on last WED of April, the TTM will be around 80. Looking to the future the current stock price based on a 15.00 dollar stock price has a PE of mid 20s which is very low for a high growth stock in the MED products field. If CTEC makes .46 next year you can bet that the market will be discounting the next years earnings FY 00 (maybe 1.00 per share) and it will be reflected in the stock price not in 3-5 years but one year from now. IMO, if the earnings growth continues CTEC will break out within the next 12 months to staggering heights. The market is always forward looking so we are within 12 months of seeing this stock go to great heights. The current Market CAP on this stock is around 160M dollars which puts it into the Micro CAP level. Most funds will not touch a stock unless they are at least a small CAP which is generally categorized above 400M to 1B dollars. My point is once this stock reaches a certain level it will become attractive to many new investors/funds. Things that can knock this off track: changes in macro economic conditions ie. higher interest rates/inflation small/micro CAP stocks being out of favor CTEC screwing the future up Their admission of a slower penetration into the Pharmacy market some six months ago was one of the reasons cited for the increased volatility in stock price. The pharmacy market is really important as that is a big untapped market. FDA and CDC screwing us by not giving timely considerations in CTECs applications--this is happening now with the (I believe with the BUN and liver enzyme test). The FDA granted approval and they have been waiting six months or more for the CDC to act on the request for CLIA 88 waiver. Listing all the risk factors make me nervous but so far the CTEC management has not screwed things up recently. There will continue to be a lot of volatility in the near term as people buy and sell. I think that we are in a position to triple in the next 12 to 18 months". Mike

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