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Strategies & Market Trends : Roger's 1997 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: Bill Wexler who wrote (8593)	12/18/1997 5:09:00 PM
From: Don Westermeyer	Respond to of 9285

Bill, This time you got my attention on BVF. I will look into it! :) Oops, did you say short squeeze? I'm already deep into stocks that already to that. I might have to pass if it's true! I did visit the ZONA thread an enjoyed the (ahem) commentary there. Thanks, Don

To: Bill Wexler who wrote (8593)	12/18/1997 7:47:00 PM
From: tcarnes	Read Replies (1) \| Respond to of 9285

dear bill the stock deal offshore is very strange. the balance sheet looks bad. i hate to say this the product is very marketable cardiac part anyway. be carful with this one. good luck tj.

To: Bill Wexler who wrote (8593)	12/18/1997 8:33:00 PM
From: Jay Quinty	Read Replies (1) \| Respond to of 9285

Bill, I was perusing Asensio's reports yesterday, and looked at BVF's chart. It had me scratching my head, since it's been trending up nicely. Also, a quick look at the sales growth figures looked impressive, and I thought I wouldn't want to touch it with a ten foor pole(on the short side, that is). But that was just a cursory look, and I'm sure Asensio's done his homework. But, don't forget what you posted recently.....wait for it to break on news :) I've been lurking, and learning lots from you guys. Thanks Jay

To: Bill Wexler who wrote (8593)	12/19/1997 7:09:00 AM
From: Ploni	Read Replies (2) \| Respond to of 9285

Bill, When you say that we should check out BioVail's balance sheet, what exactly catches your eye? Did you mean instead to refer to the cash flow statement, and the fact that it is negative? For my fundamental analysis, I've always looked at the following ratios (since we analyzed a company's annual report in Engineering Economics, about 100 years ago): Liquidity Ratios (Current Ratio, Quick Test) Leverage Ratios (Debt to Total Assets, Times Interest Earned) Activity Ratios (Inventory Turnover, Fixed Assets Turnover, Total Assets Turnover, Average Collection Period) Profitability Ratios (Return on Total Assets, Profit Margin, Return on Net Worth) I do that for the past two fiscal years, and extrapolate from the latest quarterly report for the present year. That gives me an idea of how the company is supposedly doing (if the numbers are true). To determine if the price is high or low, I look at P/E (and how it compares with the growth rate), P/book, P/sales, and P/cash flow. I see that BioVail has a negative cash flow, and very high price/book and price/sales; that inventory turnover dropped (because the inventory virtually doubled and the sales are practically flat); and I notice the average collection period jumps from 119 days on 12/31/95, to 57 days on 12/31/96, to 163 days now. However, I'm wondering what else I'm missing, that doesn't show up in these formulas? What leads you to suggest that they are playing games with revenue recognition? (Are you saying that they have long-term contracts, and can choose when they want to show the revenue?)