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Stock Analysis of Osteotech Inc.
Thank you for requesting an analysis of Osteotech Inc. from VectorVest ProGraphics. The ticker
symbol for Osteotech Inc. is OSTE. OSTE is traded on the NASDAQ and options are available on
this stock.
PRICE: OSTE closed on 12-May-1998 at $20.30 per share.
VALUE: OSTE has a Value of $29.30 per share. Value is the foundation of the VectorVest
system.It is a measure of what a stock is currently worth. Value is based upon earnings, earnings
growth rate, dividend payments, dividend growth rate, and financial performance. Current interest
and inflation rates also play an important role in the computation of Value. When interest and/or
inflation rates decrease, Value goes up. When interest rates and inflation increase, Value goes
down. Sooner or later a stock's Price and Value always converge.
RV (Relative Value): OSTE has an RV of 1.51. On a scale of 0.00 to 2.00, an RV of 1.51 is
excellent. RV reflects the long-term price appreciation potential of the stock compared to an
alternative investment in AAA Corporate Bonds. Stocks with RV ratings above 1.00 have attractive
upside potential. A stock will have an RV greater than 1.00 when its Value is greater than Price,
and its Relative Safety (see below) and forecasted earnings growth rate are above average. In
some cases, however, a stock's RV will be above 1.00 even though its Value is well below Price.
This happens when a stock has an exemplary record of financial performance and an above
average earnings growth rate. In this case, the stock is currently selling at a premium, and the
investor is banking on future earnings growth to drive the stock's price higher. This information is
very useful not only in knowing whether or not a stock has favorable price appreciation potential, but
it also solves the riddle of whether to buy high growth, high P/E, or low growth, low P/E stocks.
We believe that RV ratings above 1.00 are required to consistently achieve above average capital
gains in the stock market.
RS (Relative Safety): OSTE has an RS rating of 0.92. On a scale of 0.00 to 2.00, an RS of 0.92
is fair. VectorVest looks at safety from the viewpoint of an equity investor (one who is buying stock
of a company) rather than that of a purchaser of debt (one who is lending money to the company).
From this perspective, consistency of financial and operating performance, stock price appreciation
history, and price volatility are the key factors used in the evaluation of Relative Safety (RS). Debt
to equity ratio, capitalization, sales volume, business longevity and other factors are also considered,
but to a lesser degree.
VectorVest favors steady, predictable performers. All stocks are rated on a scale of 0.00 to 2.00. A
stock with an RS greater than 1.00 is safer and more predictable than the average of all stocks. A
stock with an RS less than 1.00 is less predictable and riskier than the average stock.
RT (Relative Timing): OSTE has an RT rating of 0.79. On a scale of 0.00 to 2.00, an RT of
0.79 is poor. RT is a fast, responsive, short-term price trend indicator. It analyzes the direction,
magnitude, and dynamics of a stock's price behavior over the last 13 weeks; then reflects and
projects the short-term price performance of the stock. Once a stock's Price has established a
strong trend, it is expected to continue that trend for the short-term. If the trend dissipates, RT will
gravitate towards 1.00. Should the price change dramatically, RT will notice the crucial turning point.
When warranted, it will explode from a Price low and dive from a Price high.
All stocks are rated on a scale of 0.00 to 2.00. If RT is above 1.00,the stock's Price is in an uptrend.
Below 1.00, the stock's Price is in a downtrend.
VST-Vector (VST): OSTE has a VST-Vector rating of 1.09. On a scale of 0.00 to 2.00, an
VST of 1.09 is fair. VST-Vector solves the dilemma of balancing Value, Safety and Timing. Stocks
with high RV values often have low RS values, or stocks withlow RV and RS values have high
RT's. How can we find the stocks with the best combinations of Value, Safety, and Timing?
The classic vector formula (square root of the sum of the squares) handles this problem. It combines
a set of forces into a single indicator for ranking every stock in the VectorVest database. Stocks
with the highest VST-Vector have the best combinations of Value, Safety and Timing. These are
the ones to own for above average capital application.
GRT (Growth Rate): OSTE has a GRT of 30 % per year. This is excellent. GRT stands for
forecasted Earnings Growth Rate in percent per year. GRT is updated each week for every stock.
Watch GRT trends very carefully. If the GRT trend is up, the stock's Price will likely rise. If the
GRT trend is down, the stock's Price will increase more slowly, cease to increase, or subsequently
fall.
Recommendation (REC): OSTE has a Hold recommendation. REC reflects the cumulative
effect of all the VectorVest parameters working together. These parameters are designed to help
investors buy safe, undervalued stocks which are rising in price, and to avoid or sell risky,
overvalued stocks which are falling in price.
VectorVest is tuned to give an "H" or "B" signal when a stock's price is approximately 10% above a
recent low, and an "S" signal when the stock's price is approximately 10% below a recent high. High
RV, RS stocks are favored toward receiving "B" REC's, and sheltered from receiving "S" RECs.
STOP-PRICE: OSTE has a Stop-Price of$ 20.10 per share. This is $0.20 or1.0% belowits
current closing Price. VectorVest analyzes over 6,000 stocks each day for Value, Safety and
Timing, and calculates a Stop-Price for each stock. These Stop-Prices are based upon 13 week
moving averages of closing prices, and are fine-tuned according to each stock's fundamentals.
In the VectorVest system, a stock gets a "B" or an "H" recommendation if its price is above its
Stop-Price, and an "S" recommendation if its price is below its Stop-Price.
DIV (Dividend): OSTE does not pay a dividend. VectorVest focuses on annual, regular, cash
dividends indicated by the most recent disbursement. Special distributions, one-time payments, stock
dividends, etc., generally are not included in Dividend (DIV).
DY (Dividend Yield): OSTE has a DY of 0.0 percent. This is below the current market
average of 1.2 percent. DY equals 100 x (DIV/PRICE), and is expressed as a percentage.
EY (Earnings Yield): OSTE has an EY of 4.98%. This is above the current market average of
4.77%. EY equals 100 x (EARNINGS PER SHARE/PRICE), and is expressed as a percentage.
EPS (Earnings Per Share): OSTE has an EPS of $1.01 per share. EPS stands for leading 12
months Earnings Per Share. VectorVest determines this forecast from a combination of recent
earnings performance and traditional fiscal and/or calendar year earnings forecasts.
P/E (Price to Earnings Ratio): OSTE has a P/E ratio of 20.06. This ratio is computed daily
based upon Price and EPS. P/E = Price/EPS.
GPE (Growth to P/E Ratio): OSTE has a GPE of 1.50. This ratio suggests that This ratio
suggests that OSTE is undervalued. Growth to P/E ratio is a popular measure of stock valuation
which compares Earnings Growth Rate (GRT) to Price Earnings ratio (P/E). A stock is considered
to be undervalued when GPE is greater than 1.00, and vice-versa. VectorVest believes that RV is a
much better indicator of long-term value. The RV of 1.51 for OSTE is excellent.
DS (Dividend Safety): OSTE has a DS of 0. On a scale of 0 to 99, a DS of 0 is poor. DS is
defined as the assurance that regular cash dividends will be declared and paid at current or at higher
rates for the foreseeable future. Stocks with DS values above 50 on a scale of 0 to 99 areabove
average in safety.
RISK (Dividend Risk): OSTE does not pay a dividend. All stocks in the VectorVest system
that pay dividends are classified as having Low, Medium or High Dividend Risk (RISK). Stocks
with DS values above 50 are above average in safety. These stocks are classified as having LOW
or MEDIUM RISK. Stocks with DS values below 50 are below average in safety and are classified
as having HIGH Risk.
DG (Dividend Growth): OSTE has a DG of 0 percent per year. Dividend Growth is a subtle
yet important indicator of a company's historical financial performance and the board's current
outlook on the future use of funds.
YSG-VECTOR (Yield-Safety-Growth Vector): OSTE has a YSG-Vector of 0.00. On a
scale of 0.00 to 2.00, an YSG-Vector rating of 0.00 is very poor. VectorVest combines Dividend
YIELD, SAFETY and GROWTH into a single parameter. YSG-Vector allows direct comparison of
all dividend paying stocks. Stocks with the highest YSG-Vector values have the best combinations
of Dividend Yield, Safety and Growth. These are the stocks to buy for above average current
income and long-term growth.
VOL(100)s: OSTE traded 191000 shares on 12-May-1998.
AVG VOL(100)s: OSTE has an Average Volume of 139494. Average Volume is 50 day
moving average of daily volume as computed by VectorVest.
% VOL: OSTE had a Volume change of 36.9% from its 50 day moving average volume.
OPEN: OSTE opened trading at $18.70 per share on 12-May-1998.
HIGH: OSTE traded at a high of $20.50 per share on 12-May-1998.
LOW: OSTE traded at a low of $18.70 per share on 12-May-1998.
CLOSE: OSTE Closed trading at $20.30 per share on 12-May-1998.
% PRC: OSTE showed a Price change of 9.7% from the prior day's closing price.
INDUSTRY: OSTE has been assigned to the Healthcare (Products) Group. VectorVest
classifies stocks into over 190 Industry Groups and 50 Business Sectors.
OSTE has about average safety with well above average upside potential. It reflects a stock which
is likely to give well above average,relatively consistent returns over the long term.
The basic strategy of VectorVest is to buy low risk, high reward stocks. We suggest that Prudent
investors buy enough high Relative Value, high Relative Safety stocks to keep the overall RV and
RS ratings of their portfolios above 1.00. As you do this, you'll find that your risk will go down and
your investment performance will improve. Not a bad combination.
Raj |
