Lotus Pharmaceuticals Inc (LTUS)

[Headley Lamar]

I agree that Lotus is a great LT investment and is very undervalued, however the 10-k did have some aspects that could easily be considered negative. These considerations would surely be enough to shake out those who were only in LTUS because they were hoping for a quick jump to $2 a share on a great 10-k.

1) Their revenues are down YOY (not good)
2) Q4 is historically their strongest quarter, but this Q4 lagged significantly.
2) They cited growing competition in Beijing as a concern for future price pressure - which could impact future margins
3) They had to write down 1.7 Million for a non-cash fixed asset adjustment (many people will miss non-cash adjustments and just assume that they missed their numbers because of sales/margin problems)

Once the new production facility is operational and people see the revenues come back with a vengeance, LTUS will begin to command a much better multiple IMO.