Stephen Simpson, CFA
Long only, growth at reasonable price, value, research analyst

Most Of The Action At Medical Action Will Come From Margins

When most med-tech companies trade at an EV-to-sales multiple of 2x to 4x, Medical Action Industries' (NASDAQ:MDCI) 0.4x multiple is a pretty clear signal that something is very different about the company. In this case, we're talking about a small medical disposables company that has not only been seriously growth-challenged, but also had to absorb significant gross margin pressures. Although patient value-oriented investors may want to consider Medical Action Industries for its margin improvement potential, investors should keep in mind that the market seldom give full credit to companies with weak internal growth prospects.

Essential Doesn't Always Mean Valuable

It's nearly impossible to perform a medical procedure without using MDCI's products (or those of its competitors). Through a...

Join Seeking Alpha PRO to read this archived article and 11,574 other archived articles
  • Access Top Ideas, chosen by Seeking Alpha’s editors
  • Filter long and short ideas by market cap and sector
  • Get Coverage of over 5,000 stocks, many of which have little or no coverage elsewhere
"In just the first month of using PRO, I used it to generate two ideas which were actionable for me. As a result of these two positions, I have earned more than 20 times the annual subscription costs for PRO." Michael Yagemann, Greenbridge Capital
"I am pleasantly surprised with the scope of small and mid-cap coverage PRO offers. You can't find that any where else." Patrick Rice, Mainstay Capital Management
100% Satisfaction Guaranteed
Money back guarantee. Seeking Alpha PRO members receive a no-questions-asked refund for membership on months paid and not used. Details