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Jim Salim Takes On
The Task
of rummaging through the bargain-basement in search of
ideas that may be healthy for your brokerage
account
MedAmicus, Inc.
Nasdaq
Symbol: MEDM
Current Price: $7.10
September 19, 2002
By: Jim
Salim
Sometimes market conditions lead
to great opportunities and this extreme bear market has created just
such an opportunity. Back on May, 28, 2002, I told our readers
about MedAmicus at a price of $8.59 per share. MEDM then
proceeded to beat second quarter numbers on both sales and
earnings projections, and announced a major supply agreement with CR
Bard. The stock has dropped $1.49 since that time.
The company will launch its
new fully automated production of safety needles next month, with
capacity of 10 million units. This new product has the
capability of increasing sales by 200% and earnings by 400%.
In addition, I believe Medtron will soon be signing a new five year
OEM contract with MEDM which will call for, among other
things, that MEDM supply Medtron with these new safety
needles. MEDM's customer base continues to expand
along with new product introductions.
The company has no debt
outstanding, 5 million in cash, and only 4,717,000 shares
outstanding. The company's business is, for all intents and
purposes, recession proof.
While MedAmicus
is growing sales and earnings at a 50% clip, it is trading at a
mere 13 times earnings. Gross margins should increase
going forward from a current rate of 47% to 50% over the next few
quarters as ramp-up in its sales force and capital costs are
absorbed.
Off a base of 18 million in
sales and 53 cents per share in earnings in 2002, I believe 2003
should bring sales of 33 million and earnings of $1.75 per
share.
At the current market price, one is buying a
recession proof grower of as much as 50 to 100% for 6 times
free cash earnings relative to market capitalization. I cannot,
in over 35 years of trading
stock, recall finding a similar situation. I believe one should capitalize
on some of the opportunities this bear market offers and
this appears to be a tremendous one.
DISCLOSURE: Jim
Salim, and entities over which he has control, own a sizable
stake in MedAmicus, Inc.
MedAmicus,
Inc.
Nasdaq Symbol: MEDM
Current Price:
$8.59
May 28, 2002
By: Jim
Salim
Watch this medical equipment manufacturer.
We believe MedAmicus is poised for annual growth of 50
to 100% over the next five years. The company should earn
52 to 58 cents per share in 2002 on sales of approximately 18
million dollars. We see revenues growing to 33 million in
2003 with earnings of approx. $1.75 per share, and revenues of close
to 50 million in 2004 with earnings coming in as high as $2.15 per
share.
Major customers include Medtronic and CR Bard.
MEDM's customer base is growing at a 100% clip, and major new
products are being introduced in the second half of this year.
The reason for this company's growth seems to be quite clear.
It does its business the right way. We hear nothing
but glowing reports from customers as to both the professional
standards and dependability of this company and it's products.
The company's products are aimed at a major segment of the
medical market: cardiovascular ailments. The company
makes safety needles, as well as percuntaneous
venous vessal introducers which are used by physicians to insert
infusion catheters, implantable ports, and pacemaker leads into
veins.
The company has no debt, five million in cash, and
only 4,707,000 shares outstanding. We believe MEDM is grossly
undervalued and has huge upside potential.
DISCLOSURE: Jim
Salim, and entities over which he has control, own stock in
MedAmicus, Inc.
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