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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (14282)	4/8/2002 9:54:34 PM
From: Spekulatius	Read Replies (1) \| Respond to of 78742

I started a position in PCOP today - the company has two business lines - the unprofitable Drug discovery segment doing contract drug development for pharma companies and Accellrys, the leader in software for drug development and simulation of chemistry and materials. At a current share price of 12$, the market cap of 290M$ is more than half covered by underlying cash (155M$) and there is no debt. The software business is quite profitable but the drug discovery service is struggling. PCOP management tried to improve this by "doubling up" the drug development arm by merging with an biotech company (EOS). This got voted down due to valuations issues. It appears to me that if PCOP can sell the drug discovery arm, we are left with a profitable software company in a very interesting niche trading at 1.5x revenues net valuation (market cap - cash). Good enough for me.