Alan Brochstein

M&A Watch: 8 Medical Consumables Companies That Look Like Buyout Targets

For now, since so much of their sales are tied to new equipment, I don't include them in my universe of stocks with primarily consumables. Even if I did include it, though, it is trading at 10X EV/Sales, well above my 4X cut-off that I used. We'll see if they pull off another great quarter! When I was last buying it (early this year), it was 4X Ev/Sales...

M&A Watch: 8 Medical Consumables Companies That Look Like Buyout Targets

I was disappointed that COV, which had no relationship with ASPM (except that the CEO used to be on the Board of Directors) went in that direction, when I find SMTS to be a very similar company but that had performed much better in terms of growth and profitability. My discussion with the CFO left me comfortable that ASPM was actually trying to get itself sold - not that COV went out shopping. Our discussion led me to believe that SMTS might address the issue in Japan, as EW distributes only to the cardiac market. There were a couple of other issues that came up - bottom line, though, is that I was quite comfortable after the call that I shouldn't be upset that ASPM got the bid. Hopefully, COV is happy with the results and continues to put increased focus on patient safety through monitoring.

M&A Watch: 8 Medical Consumables Companies That Look Like Buyout Targets

You are welcome, and thanks for you kind words...

24 'Expensive' Stocks That Just Might Go Higher

Thanks for sharing...


On Apr 06 04:24 PM DesertRat87 wrote:

> The screener I use is the Morningstar Premium Screener and I make
> heavy use of the proprietary features such as ratings, grades, and
> fair value as I've worked through the definitions and generally understand
> and agree with what they represent.
>
> The screen I referenced is one I developed and title 'Value Priced
> Growth'. The theme is "Buy financially solid companies with solid
> growth characteristics at a discount to fair value."
>
> The Growth criteria is represented by the Growth Grade >= B- since
> I'm looking for generic strong growth.
>
> I then add in a PEG <= 2 to not overpay for the growth.
>
> Financial strength is represented by Financial Health Grade >= B-.
>
>
> Since I want to buy at a discount I add the Morningstar Rating >=
> Four Stars.
>
> Since I'm (a) impatient and (b) would like to avoid a "falling knife"
> the tests (1 Mo return % Rank Industry <= 3 Mo return % Rank Industry)
> and (1 Mo return % Rank <= 33) are added for relative strength selection.
>
>
> From lessons learned I also add liquidity tests (Market Capitalization
> (mil $) >= 200) and (Average Daily Trading Volume >= 50000).
>
> When I need to replace a portfolio company I sort by Price/Fair Value
> during odd numbered months and take the lowest ratio and for even
> numbered months I sort by 1Mo Return % Rank and take the lowest (highest
> performing). Any current holdings are skipped over.

24 'Expensive' Stocks That Just Might Go Higher

What system do you use for your screen? Is it a canned screen or one that you created?


On Apr 06 12:40 AM DesertRat87 wrote:

> I've owned both Atheros (seekingalpha.com/symbo...) and
> Volterra (seekingalpha.com/symbo...) off of a financial
> strong company growth screen that I use since March 2nd. However,
> my weekly review has me selling Volterra on Monday due to its growth
> rating dropping.
>
> Atheros and Chipotle are both on my current screen. It good seeing
> that a related approach does produce at least some overlap in results.

24 'Expensive' Stocks That Just Might Go Higher

Thanks for your comment. I believe that some of these "winners" will prove to be good investments in the coming quarters. I would be looking to buy them vs cash later (pullback), but they might make sense now vs. companies with weak balance sheets that have snapped back too sharply. My big theme this year has been to avoid troubled balance sheets, and these companies are potentially the converse. Big picture, in a bear market, companies that are growing can perform exceptionally well.


On Apr 05 06:58 PM NetGeezer? wrote:

> May just be me, but I don't get a clear reason for why you suggest
> this screen. Is the reasoning just what the title suggests; that
> these will likely go higher? Also saying that since the bargains
> are already gone, these would be next best thing?
>
> And when are you suggesting buying in? Now or wait until after the
> next expected downturn and pick them up at the bottom? Just want
> to be sure I got you. Thanks.

24 'Expensive' Stocks That Just Might Go Higher

Give me a break. I shared a forward looking analyis, saying that this is a concept (and potential list) from which I intend to buy. I understand your sentiment about "reporters" rather than "doers", but I think that you are wrong to judge me on this one posting. Go back and check out my DORM article recently - had a position (smaller now since Friday) .seekingalpha.com/artic... ISRG - had a position. Last week, CRR (plus two in my model portfolios) seekingalpha.com/artic.... Before that, MPR: seekingalpha.com/artic... I don't often have short positions (prefer to just use ETFs), but I rarely suggest "shorting" (sell or don't buy).

As far as preferring to hear where I have "actually put my own money", I publish my holdings daily on my corporate website. Do you?


On Apr 05 09:43 AM WACG wrote:

> I always have to laugh when I hear, at the end of an analysis and
> stock recommendation speech, that the analyst has "no position" in
> anything he/she has talked about. I would prefer to hear where they
> have actually put their own money. Why bother me or others with what
> you do not think is fit to own (or be short of)!?

20 'Babies with the Bathwater' Stocks for This Week

Perhaps the new environment we are in should lead you to question the validity of your model regarding "strong" fundamentals. Just a question, really, since I don't know how your model works to characterize that attribute. RNT shows up on your list, and I have done proprietary work on that one to suggest that it is an "aids and abetts" consumption of things by people who can't afford them. It would seem that while this worked and could produce "earnings stability" and "growth" in the past, one would have to be very skeptical that it would continue to work. Similarly, I know SRDX very well. I am not sure how you characterize their fundamentals, but their "growth" has been driven by a large deal with MRK that has now been cancelled. In the most recent quarter, though, there was a big boost (at least to GAAP earnings) due to that termination. Rather than debate the details of your model, suffice it to say that these are times when sticking to what has worked in the past is not likely to prove very helpful in my opinion. I have had to totally shift my focus (away from sustainable growth at a reasonable valuation combined with good technicals) to a deeper value strategy focused on only the very best balance sheets. In the past, I liked to buy good charts, now I have to sell them and instead focus on buying oversold stocks that have overreacted to near-term news.