MRE (medco research) Message Board

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Biotech / Medical : MRE (medco research)

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To: Harold V who wrote (96)	6/23/1998 8:06:00 PM
From: Xiaoping Zhang	Read Replies (1) of 192

I am thinking about buying this stock, but one thing bothers me - i.e., this company has very low tax rate in the past 5 Qs from 0.86% to 6%. This must be due to their tax credit accrued during previous years (e.g., 1993 - 1995) as a result of operation losses and, partially, due to their R&D expenses which qualify for a lower tax rate. However, in the past couple of years, the company has been in black and they will soon use up their tax credit. When new tax rate kicks in at (say) 36%, the EPS will be slashed downwards as in the case of GNRL and unprepared small investors will get shocked. I have seen several stocks with this problem but have not found any one on this thread discussing it. Am I wrong on this? Any comments are welcome. X.Z. 6/23/98

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