Guys, Don't forget leverage. Leverage, leverage,leverage equals earnings, earnings, earnings,which (in the words of Mr Lynch) equals price appreciation, price appreciation, price appreciation. Leverage is the key emphasized by the VanKasper and Principal reports and emphasized by Mr Frankel in his conference call on 1-23-97. He said for every dollar of sales over approx. $9.1 million in a quarter, more than 50 cents flows straight through to the bottom line (depending on product mix). We saw a vivid example of this in the 3rd quarter - hopefully an ongoing active strep a season and the P+G collaboration will lead to increased revenue in the 4th quarter w/ the same or even better results than the third - Indeed, I think the margins are even better on the H. pylori test than on the strep a tests. Maybe another quarter or two of "beating the street" estimates is necessary before the bigger boys in the market take notice- but take notice they will eventually if Quidel duplicateds its 3rd quarter in its 4th quarter. I just took this opportunity to buy more QDEL - this is the calm before the storm, IMHO - may last 3 days, 3 weeks of 3 months, but I don't think it will last too much longer than that.
BOB |
