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Biotech / Medical : The Stock for 1999(Polymedica)PLMD(Medical Supply Co.) -- Ignore unavailable to you. Want to Upgrade?

To: PAR who wrote (2515)	2/19/1999 4:05:00 PM
From: Apakhabar	Read Replies (1) \| Respond to of 3414

Although I've been out of this stock since last summer I started following it again when they switched exchanges, and while Sam is correct to say the current price is just a bit over book value, IMO PLMD is the wrong kind of stock to be buying right now. Because it's not much of a biotech anymore-- it's more a specialty retail company-- it will never command a premium PE. More importantly, aside from a few thermometers and cranberry potions that can be seen in a drug store, PLMD has no drive-by/walk-by public recognition (i.e. Golden Arches). So the only way to let people know about the company is by advertising-- and PLMD buys expensive ads. The notion that a customer on average does not become profitable until their fourth (or was it seventh?) purchase does not make a happy business model. PLMD offers a nice service, but it's not cheap and it's products can largely be bought elsewhere, so there may well be competitive issues to come. Any negative-impacting changes in Medicare would devastate the stock price. That may sound unlikely now but it is nevertheless a risk that will always be priced into the stock. The 100,000 share block that traded a week or two ago at 8 1/2 is indicative of the fair value of PLMD. That was clearly one institution of pros selling to another. That price had nothing-- nothing-- to do with MM manipulation. The MM simply lowered the price to what the buyer was willing to pay and the seller was willing to take for the block. PLMD has declined from 14 to 8 since last February. One can declaim all day about what a value it is and how crazy the market is for bidding up the Internet stocks, but any such talk is just sour grapes. To beat the S&P 500 you have to be a good judge of BOTH the company you want to buy and the conditions/sentiments of the marketplace. PLMD may look like a value on paper but in today's marketplace it is considered dead money. I lost only one point holding Polymed for about six weeks last May/June, but when I sold (at 9 7/8), it wasn't to avoid further losses so much as to avoid losing the opportunity to buy stocks that were going up in what has been, after all, the greatest bull market in history. Anybody holding a lot of shares of PLMD right now should also consider the low volume and the difficulty they will have trying to unload a block of, say, 5000 shares without causing the price to drop another half a point. Sam, you couldn't be more wrong about buying pressure here. There is none. There is, at best, some willingness to bottom-fish, but no sustained buying interest at this time. One has to ask whether or not earnings are going to exceed estimates by such a margin that buying interest in the future will increase. When that is likely, only then will the price appreciate in a dramatic fashion.