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

To: Sepster who wrote (18169)	12/10/2003 5:13:48 PM
From: Paul Senior	Read Replies (2) \| Respond to of 78751

Regarding PLMD: Well, I agree, Sepster. Either the company is peppered with very crooked managers or a flawed business model - in which case the stock could be cut in half, at least, from here - or maybe it has problems typical of aggressive businesses (e.g. -g- has only somewhat-crooked managers - i.e they push the envelope too far in dealing with the government). With some companies/managements like this, sometimes (it seems to me) the government takes action but doesn't cause the business to crater. And some of the issues facing PLMD have been brought up before, so might already be factored into the stock, as you suggest. I'm one who often buys after looking in the rear view mirror. In past, and up through last reports, the numbers and ratios we've talked about here for PLMD look very good. I'd guess maybe the upside for PLMD stock price from here is say maybe 20-40% near term (whatever near term means) However, there lurks the possibility that the downside could be severe. Given what I see though and how I like to invest, I'll bet the probability of an eventual upside move is higher for the stock than it is likely the stock will be chopped as a result of the negative issues brought forward by the short sellers. I've started a VERY small exploratory position today. Jmo, and I've been wrong many, many times.

To: Sepster who wrote (18169)	12/10/2003 10:33:38 PM
From: Spekulatius	Read Replies (1) \| Respond to of 78751

Re PLMD - the company has a good balance sheet, so it's not an Enron, however its earnings are of poor quality. For example S&P's cash flow estimates differ materially from their companies own statements: Cash flow: 2001: 54.5m; 2002: 66.4m; 2003: 82.9m S&P cash flow 2001: 54.5m; 2002: 66.4m; 2003: 46.5m Just a preliminary glimpse at the balance sheet confirms the suspicion that earnings & cash flows are overstated by activating what is usually considered a business expense. From Yahoo balance sheet data I deduct that: - current assets have increased by 10 m$ over 9 month - total liabilities have increased by 7 M$ (why have LT liability charges almost doubled in 9 month to 20M$ ???) - Property plant and Equipment has increaed by 12M$, intangible assets have increased by 12M$ !! - payed about 10M$ in dividend - the company does not seem to buy back stock The earnings quality issues as well as the issues with Medicare, FBI investigates as well as the fact that quite sophisticated shorts like Asensio are betting against PLMD are strong red flags to say the very least. For me, earnings and management quality are more important than valuation. That is a lesson I learned after investing in EP, ELN, MIR and WCOM.