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Psychemedics: Quality At A Large Markup

Executive Summary

    Company's claims of superior technology is found in patented methodology creating a moat The drug testing business has attractive business properties, low capital expenditures, has significant economic goodwill with an average after tax earnings of 25% of net tangible assets without debt over the past decade, generates cash before providing the service and sometimes doesn't even have to perform the service. Long term prospects of the company seem viable because there is a high likely hood of continued drug testing, however, low growth Management has been decent allocators of capital with dividends The market has high expectations baked into the price of the stock as it trades at a high multiple of net tangible assets. PMD is also ...
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