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ALRS |
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to: undervalued players
from: todd
Alaris has been in my portfolio for over 2 years. It caught my eye after a fall from the 17 range to under 1.5 in 92-95. Alaris(Advanced medical - AMEX- before name/mgmt chg) is the world leader in IV pumps under the IMED and IVac names. Here is the skinny... during the drubbing from 17 to 2, co. was under direction of M.D., not skill business person/mgr. New mgmt took over in '96, and has made tough decisions to get comp. rolling again. Lots of debt, but has shown
5% growth in last 2 qrts. Margin improving, and backlog going up. Conference call on Wed confirmed business turning corner. Here whats exciting, avg med device co. trading at 3 to 4 times mkt cap to sales. ALRS under .8 to 1. If improvements continue, could earn .30 to .40 in 98, and with some debt pay down that number could move to .70 in 2 years. in early 97, new CEO bought $450,000 in stock at 3.25-3.75. Ch of BD and insiders own over 60% of stock, with COB in at cost of 6-8 of conversion of old preferred. Outside chance of a Bax or other device company taking a look. I dont expect quick turn , but at 2.2 mkt cap to sales the stock is 8-10. This week finished up 15% for week. No hype, just ugly and will need couple of good solid quarters to get big boys back in. Would enjoy thoughts or comments on stock or chart.(ALRS-NASDAQ). Good investing!
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