I would think that the earnings warning is enough to account for the drop. The shortfall was in their medical device sterilization business. This is their core operations, and could be an indicator that management has lost focus chasing dead cows.
It is troublesome because for every 1% they lose (actually, slow growth) in medical sterilization, they need to increase all other sectors by 3% just to "break even". In addition, there was a mention several Q's ago in a 10Q that the medical establishment was moving toward disposable devices, and this could affect growth. If there was going to be a collapse in their medical business, this is how it would first appear, as an "anamoly". This is of course, just a possible scenario; it could very well be that sales are just pushed back 1/2 a quarter. This will be known by the end of 1Q.
I'll have to get a look at the 10Q/K to determine more.
If this is just a temporary setback, STER is a great buy at a current PE of 11.
Well, that's my take. Comments welcome.
Cheers,
Rich |
