$heff's $tation of $tocks & $olid DD

[stervc]

MCLN .14 Valuation Justification…

First let’s talk about “the known” versus the unknown. What’s known is that MCLN has a contract with NASDAQ:MDAS. What’s unknown is what further contracts that they have submitted their bids in for to be awarded. One major contract that was discovered by amigo777 reflects that MCLN has a bid in for a major contract with Premier:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=44442236
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=44443383
http://www.premierinc.com/about/index.jsp

MCLN’s chances for being awarded contracts have increased given that major companies within MCLN’s sector/industry such as Stericycle, Inc. has agreed to support a Department of Justice demand to sell off some of its medical waste collection businesses in four states to settle an antitrust lawsuit and finalize its $182.5 million acquisition of MedServe Inc. The goal is to create an impact that will enhance contracts and prices of other smaller companies which have been fighting to compete for a bigger share of the multi-billion dollar medical waste sector. Given this action, I like MCLN chances of winning that bid from Premier. The PR below explains it in greater detail:
http://finance.yahoo.com/news/Department-of-Justice-Demand-iw-3878631626.html?x=0&.v=1

Below is the near-term .14 per share price expectation from Goldman Small Cap Research:
http://finance.yahoo.com/news/Goldman-Small-Cap-Research-iw-608259694.html?x=0&.v=1

Notice how Goldman gives MCLN a near-term target of .14 per share and an early 2010 price target of .40 per share. This is the time frame they have designated for these prices to be achieved. Now, look at it like this too… if they stated the year early 2010 for reaching .40 per share, then with stating that MCLN has a near-term term target of .14 per share means that they know something that is expected to transpire before 2010 to justify the .14 per share price target or they would have stated the year 2010 too as they did for the .40 per share price target. This means that they are talking about two different time frames; late 2009 and early 2010. This means that their impact time frame is in 2009 for hitting .14 per share since the way how they mentioned hitting .40 per share in 2010.

Now consider that 2009 is almost up. That means that we should be expecting major news to justify that .14 per share any day while we are in 2009. Again, the beauty about this is that 2009 is almost up. Since this is a paid report, this makes it further subliminal as a hint that the company has something big that they know they want to properly announce, but wants to make sure that enough eyes are on it within the investing community before releasing such news.

We all know how important marketing is within the investing community. You can have the best kept secret in the world, but if investors don’t know you exist… then that is just what you would be… the best kept secret in the world. We all must admit that MCLN is fairly new to most of us. Heck, there was not even an IHub board for MCLN until the day I started it back on 4 Nov 09. I think they believe that this news that they are preparing to announce is news that will be in front of millions that are ”now” much more familiar about MCLN as opposed to a very small handful that barely even knew of their existence.

Now let’s justify the .14 per share MCLN near-term price target. Let’s go back to the MCLN and MDAS contract. Read the two posts below to understand the potential of that contract:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=44433410
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=44331053
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=43578638

From the posts above, you see that MCLN would probably have a standardize $1M for each client that it contracts with derived by the amount of pounds of Regulated Medical Waste (RMW) per person from the thousands of hospitals/providers that MDAS is already contracted with that will be needing these services as explained within the posts above. One should note that MCLN’s disposal of RMW services will be ”annually reoccurring” which is regular Income and not just one time contracts.

Keep in mind too that MCLN has contracts that have served approximately 125 health systems; 3,300 acute care hospitals; and 30,000 ancillary or non acute provider locations. Of these thousands of clients for NASDAQ:MDAS, all are in need of disposing of RMW which is why MDAS contracted with MCLN to be their arm for performing this function they lack from their company to offer to the MDAS thousands of clients. This is why such could and should very easily transform into clients for MCLN to contract with. As I mentioned above, it costs about $1,000,000 per contract per client to pay for these MCLN ”annually reoccurring” services as I had justified and indicated in the posts above. To justify the .14 per share valuation thoughts that Goldman Small Cap Research Pr-ed, MCLN only needs to secure 31.2 clients out of those thousands of MDAS clients which would give them $31,200,000 in Revenues.

Let’s figure the currently known Outstanding Shares (OS) of roughly about 650 million shares. Let’s figure that they are deriving their .14 per share short term target from a conservative P/E Ratio of 12 (although I know it’s higher for their industry) to use as their growth rate for that particular Industry. This would mean that Goldman Small Cap Research is considering that MCLN has justification that would bring them Revenues of $31.2 Million in the ”near-term” of which I will consider using a conservative 25% profit margin to derive “Net” Income/Earnings in the amount of $7.8 Million to derive the valuation below:

$31,200,000 x 25% Profit Margin (or .25) = $7,800,000 Net Income

$7,800,000 ÷ 650,000,000 (OS) = .012 EPS

.012 EPS x 12 P/E Ratio = Approximately .14 EPS

As I had previously mentioned in a similar model, there are ways that might have been considered easier to derive how the .14 per share valuation was considered, but the above could be at least used as a framework to substitute when we think certain news is released to confirm why that .14 per share and/or the .40 per share short term targets were released in a PR. In my opinion, for such price targets to be released by such prominent companies, whether paid advertising or not, they must know something of huge substance that is either done or complete. This is my guest.

To add, MCLN is still on the Regulation SHO List:
http://www.nasdaqtrader.com/Trader.aspx?id=RegSHOThreshold

According to the SEC, the MMs have 35 days to cover:
http://www.nasdaqtrader.com/TraderNews.aspx?id=ra2007-086

According to the Buyins.net report, so far, MCLN has been listed on the Reg SHO list for 31 consecutive days and is listed on the “Imminent Buyin” list:
http://www.buyins.net/tools/short_list.php?dys=%3E12

This is saying that they have at the very least, 4 days to cover MCLN; per SEC. I think critical mass is upon us here with MCLN. I believed in MCLN before ever knowing of any kind of involvement from BioMedReports, but I do see them existing here as a plus as likewise MCLN being on the Reg SHO List. I bought MCLN because of doing my DD on it and liking what was new to me. I still like MCLN and I will continue to weather the storm as I believe much more sunny days are ahead.

v/r
Sterling