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Biotech / Medical : RXSD Rexall Sundown -- Ignore unavailable to you. Want to Upgrade?

To: Dorine Essey who wrote (80)	9/24/1998 4:44:00 PM
From: Anthony Wong	Read Replies (3) \| Respond to of 327

Dorine & thread, the following is old news from Bloomberg but may be one of the reasons for RXSD's recent price weakness: Fastenal, Others Seen Declining by Roberts, Barron's Reports Bloomberg News September 12, 1998, 1:14 p.m. PT New York, Sept. 12 (Bloomberg) -- Fastenal Co. is among the stocks that could fall, in this case due to higher labor costs and lower profit margins, Mark Roberts, president of the Cambridge, Massachusetts-based Off Wall Street Consulting Group, told Barron's. He also sees further declines from Resource America Inc., whose accounting methods he's criticized, and he said industry sources are telling him a number of Rexall Sundown Inc. products could have a shortfall in active ingredients. Roberts also warned that a computerized program from Educational Testing Service could threaten Sylvan Learning Systems Inc.'s business as exclusive commercial administrator of computerized versions of ETS exams, the paper said. Among Roberts' short-sale recommendations that have paid off this year are MRV Communications Inc., Sirrom Capital Corp. and Sunterra Corp.; in a short sale, borrowed shares are sold in the hopes of profiting by replacing the shares at a lower price once the stocks' prices have fallen. (Barron's 9/14 22 www.barrons.com) --Anne Pollak in the Princeton newsroom (609) 279-4043/shw

To: Dorine Essey who wrote (80)	9/24/1998 5:02:00 PM
From: Anthony Wong	Respond to of 327

The following article explains the weakness in the nutraceutical sector: 09/18 15:34 RESEARCH ALERT - HSBC starts TwinLab as accumulate NEW YORK, Sept 18 (Reuters) - HSBC Securities has started coverage of TwinLab Corp. <TWLB.O> with an "ADD" rating, the firm said Friday. This rating, which is one step below buy, could be called accumulate, a spokeswoman explained. The stock was holding onto a two point gain, at 34-5/8 in the final hour of trading Friday, after reaching an intraday high of 34-1/8, -- HSBC describes Hauppauge, N.Y., based Twinlab as a manufacturer and marketer of vitamins, minerals, and nutritional supplements. The company is part of the nutraceutical industry which had estimated 1997 U.S. revenues of roughly $10 billion and is growing at a compound annual growth rate of 15-20 percent, the firm noted. -- It said the major players in the nutraceutical industry are TwinLab, NBTY Inc's <NBTY.O> Nature's Bounty, Rexall Sundown Inc. <RXSD.O>, General Nutrition Cos Inc. <GNCI.O> and Weider Nutrition International Inc .<WNI.N>. "Combined, these companies accounted for $1.95 billion in annual revenue in 1997, or approximately 20 percent of the domestic nutritional supplement market. -- TwinLab and many of its competitors experienced a steep decline in stock prices in the past two months, prompted by GNC's announcement regarding margin pressures, HSBC said. -- It pointed out the decline came at a point where the industry was demanding high multiples, adding TwinLab is now trading at 20.1 times estimated 1999 earnings of $1.62 per share, down from a high of 28x in June. -- The firm said pricing pressure from GNC should not have a significant impact on TwinLab, as GNC accounts for only 10 percent of the company's revenue, and currently TwinLab has been expanding its distribution through mass market retailers. -- It said TwinLab experienced strong revenue growth of 57 percent during the first half, due in part to its association with Wal-Mart Stores Inc. <WMT.N>, and is expected to maintain a long-term growth rate of 25 percent per year.