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

To: Allen Furlan who wrote (6934)	4/24/1999 11:01:00 PM
From: LauA	Read Replies (2) \| Respond to of 78525

SERO - I'm wondering if there's something that the 'market' knows that isn't reflected in the 10K and the PR's? It appears that the stock price declined 50% in linear fashion since December, with another 50% "waterfall" collapse after the recent news that two international partners will not be taking expected antibody volume because their plants are shut down. Since Bayer is a customer for 40% of their output, and Centeon takes another 14%, you wonder if they aren't about to take a big hit? Note that three of four Bayer contracts expire in 1999. (I recognize that the 10K says that international customers account for only 47% of their sales yet it looks like these two German Co's are 55%??) In any case this doesn't look like a terribly profitable business. The product is basically commodity, and regulated. There are stated unknowns like Mad Cow disease (CJD), HIV, Hepatitis, etc. where they are harvesting plasma from professional donors, winos, etc. Management indicates that the loss of international business will cause a 15 cent hit to earnings; expect earnings of 50 cents this year. At a PE of 10, $5 could be fair. [I freely admit that a real understanding of the risk/reward of this business are outside my circle of competence. I faced a similar conundrum with CURE when I posted on it several weeks ago. In that instance as well the 'market' 'knew' something that was not apparent to the casual reader. In that case as well management implemented a huge stock buyback program.] Lau