MSLI
A Growth Pharma Story
I brought some MSLI in the $1.24-1.25 range, here is what I like.
1) Earned about .06 adjusted in q2 and .12 adjusted in 6 months. Hence the stock is very cheap (I adjusted for the new share count by the way with the financing deal in those numbers).
2) Given guidance of ebitda of 47-50 million I expect even better numbers in q3 and q4, I wouldn’t be surprised if earnings approach .08-.11 each quarter adjusted.
3) Stock is waaaaaaaaaaaaaaaaaaaay off it’s highs hence I think you are getting a very good entry point here as well.
The questions you are going to ask me is how do you calculate adjusted eps?
Well I start with net income and add back amortization, acquisition expenses, An foreign exchange losses, I also subtract derivative gains. I don’t think anything I said you wouldn’t ex out plus or minus in my opinion.
Secondly, the next knock you might say is you don’t like their debt?
That is definetly a concern otherwise this stock would be a no brainer to triple, as is I think it has a good shot to go up 50-100% from current prices in my opinion.
Conclusion: MSLI I think is very attractive at current levels and could be brought on weakness in my opinion. Of course with earnings you never know. But it is all about risk/reward and I think this is one of the cheapest healthcare stocks out there. All is just my opinion, and I could always be wrong though.
