International Medical Devices Share Discussion Threads

[boadicea] 20/6/2003 12:01

Early sells knocked it down. Later buys (exceeding sells) failed to bring any recovery on an admittedly poor day. Previous comments about a selling programme overhang do seem to have credibilty. Wouldn't it be nice to know when this o/hang is about to dry up so one could pile in before a more normal valuation is resumed!
(Do I hear a voice saying "Don't pick an argument with the market"?)

[njp] 18/6/2003 14:10

Look like rollovers to me. Settlement day?

[keyboard] 18/6/2003 13:34

May have something to do with NMS.

[boadicea] 18/6/2003 13:30

What is the significance of a pair of transactions for the same odd number - usually some thousands - of shares appearing simultaneously at a very close pricing? Can understand if marked M or B, but these are nearly all O.
Many examples in recent times, including particularly today.

[njp] 18/6/2003 00:58

Robbie

Don't think your figures are far off the mark. INT is very cheap indeed but still perversely weak. Obviously still an overhang problem.

[njp] 17/6/2003 23:17

Willing to bet there aren't any icebergs, boadicea, just a persistent stock overhang caused by a seller who has reasons other than fear of poor results to get out. All IMHO of course, but I know the company well enough to be confident I'm right.

As to results, the company have indicated that H1 will be disappointing but have not warned for the full year and are also on record as stating they expect 'low double digit growth' in profits. I can't see 2003 delivering less than 20p eps pre goodwill and exceptionals and I don't see any surprises on the goodwill write off / exceptionals front either.

[boadicea] 17/6/2003 23:00

PS. to above -
Why suddenly no trades after 13.35 today?

[boadicea] 17/6/2003 22:46

Thanks for your work on this Robbie - I'm sorry you don't think it's a gold-mine, but cannot say I totally disagree.
I have taken a rather simplistic view from their limited segmental analysis in the annual report (not given in the preliminaries which I had previously worked from). Some of the gaps you mention appear to be deliberate policy for commercial sensitivity reasons.
The net difference between origins and destinations of turnover (in note 2a)appear to be only £3.5M in a total of £275M. I have assumed this is equivalent to 3.5M net exports to euroland - more or less negligible.
Within this, individual business segments could differ significantly in opposite directions.

I therefore assume that this gives scope for adjusting margins to maintain overall competitivity with little overall effect on profit, albeit making particular business operations seem less (or more) attractive.
Unlike many companies, pension liabilities are stated to be limited to £491k (in France), all other pensions being defined contribution schemes.

The main downside is contained in the statement at the AGM about profit attribution between H1/H2, logically interpreted as an H1 profit warning but implying at least a more normal H2.

I can find nothing in the last accounts to explain the persistent price weakness. My only fear is that the veiled H1 warning is the tip of an iceberg yet to be revealed: or else that someone has a sniff of something going sour - e.g. delays in getting new production on stream. If such were true, I cannot believe that the management would be so careless of their reputation as not to make an announcement when the share price is obviously suffering.
If you trust the management - and we have no evidence not to - then INT seems to be wondrously cheap compared to its pharmaceutical peers.

All imho and dyor.

For the present, I continue to hold.
As always, time will tell - and please put me right if you think I have misinterpreted any facts.

[robbie12] 17/6/2003 10:19

My figures were nothing better than guesswork and clearly far too many holes in my research so I left it alone. Thank God. I will wait until the next results before making a more informed judgement. On the basis of the management comment that H2 will be even more important than normal - smacks of a H1 warning - I see no reason to buy this really. Looks cheap but is it?????

[robbie12] 16/6/2003 10:13

A quick point: the move from distribution to a manufacturing company is the key for this company going forward. My PE of 10 seems about right for a company taking a slight step back this year. As the manufacturing side takes over in performance and prospects and growth retuns then it should be valued at a market valuation ie closer to a PE of 15. Target price for March 2005 is 300p+.

[robbie12] 14/6/2003 14:15

Think the market in general is overvalued and the majority of small cap biotechs are crazy - TED/MDY etc - retail investors all piling in, reminiscent of the bubble. Fundamentals are poor - so much hope value. This share at least makes money - has a single figure PE and a yield that exceeds medium term govt bonds.

[boadicea] 14/6/2003 10:59

Hi Robbie.
"Frantically overvalued market"? Is that your general view or just the pharm/biotech sectors, in which case I agree.
This share's a cruiser not a speed-boat imho, so I don't expect fireworks.

Anyway, welcome to this thread.

[robbie12] 13/6/2003 20:15

Yep an old CEL and THE man - both did me very proud. THE I sold out of at the right time and CEL I did not. Sold at 16/17 and missed the opportunity to get in at 14/15. Now 26!! Still feel choked so dare not even read the board there anymore!

Can't say I feel that this is a stonking buy on the face of it but it appears to offer some value in an otherwise frantically overvalued market (NB CEL still looks pretty good value but can't traumatise myself any more by buying it!)

Will post at some point this weekend with my thoughts. Enjoy the sunshine while it lasts...

[njp] 13/6/2003 19:40

boadicea

I know Robbie's shared our mutual interest in CEL at some point. Management have a good track record here and do, I'm sure, have strategies to cope. Not sure how hedged they are against the euro (the rate hopped out of range of the hedge arrangements they referred to in the AR) but I know they have next to no business denominated in USD - they're predominantly UK with the rest mostly Europe.

[boadicea] 13/6/2003 18:49

Pleased to see some sensible comments and more interest in this thread. I have been adding modestly since it fell below 180p, latest at 148p, on the basis that the price just seemed too low, which I attributed mainly (but perhaps incorrectly) to shorters pushing it down. I was beginning to feel a bit lonely.
Robbie12 is a familiar poster (THE or CEL - I forget which) whose opinions I respect, so I am now feeling much encouraged.
I'm in it for the medium/long term and believe the management is on the right track.
Higher euro should not be all loss given sufficiently nimble footwork, although I do hope they're not having to source in euros to sell in dollars!

Good luck to all!

[njp] 13/6/2003 17:50

Robbie

Zocor is simvastatin. Obviously they were doing a lot of business with it as a parallel import. Excatly how much, though, I don't know and would have to check out with them. Parallel imports, though, are not nearly as significant as they were in profit terms - no more than 10-15% I'd have thought. Furthermore, they are strong in generics - a long term growth area for them - so I guess it's out of one hand and into the other.

Manufacturing contributes some 60% or more of profits now and is doing well, which I have confirmed from my contacts. Will have another chat with the company sometime next week.

[robbie12] 13/6/2003 17:20

Yep clearly someone offloading a bit into the rise. A few largish sells and a price creeping up is a sure sign of the fact that the seller is not too big or has almost exited. I guess the key to this one is how bad the distribution side is - last statement said topline growth but margin pressure. Now if topline goes up 10% but margins are down 10% then you are still keeping you're pre-tax level pretty stable. If they can do that then a PE of 10 seems reasonable - thus 200p plus. Can you tell me anymore details about this drug coming off patent - any ideas about revenue in prior years and how they intend to meet the challenge? Thanks in advance.

[njp] 13/6/2003 17:10

'Fraid so, Robbie! Doesn't seem to be the most popular share. It has some staunch supporters, though, or had until the fall through £2.

Personally, I was hoping for the weakness to continue for a few more weeks so I could take a much larger position. Still see potential for 200+ later in the year provided the interims aren't a disaster. Can't see that, with manufacturing doing well, but I guess they'll be down on last year.

PS Not sure we're fully out of the woods yet, overhang wise. The rise today was a little restrained.

[robbie12] 13/6/2003 17:02

Will complete my analysis - as been out most of the day - over the weekend. As an aside it seems mighty quiet here. Is it always like this?

[edbassett] 13/6/2003 11:22

looks like a decent bounce on the way

obvious chart reaction and supported by value

[njp] 13/6/2003 10:05

Agree - eventually. 180p could come very quickly, but we'll need to get the interims out of the way before we see further sustainable advances IMO. Remember, they've warned that profits will become more skewed to H2.

PS - Think ADVFN has 'eaten' my (inoffensive!) post 156!

[robbie12] 13/6/2003 09:45

If eps for 2003 is expected to be 21.3 and 24 for 2004. Then an immediate target of 200-250 is more appropriate. I need to go through the last couple of results first. Someone please put a stop to the shareprice rise in the interim. Thanks.

[njp] 13/6/2003 09:34

180p's a reasonable target in the near term, ed.

[edbassett] 13/6/2003 08:50

yes, up she goes, seem to have got this right

may expect some short covering today,

I'm looking for 180p