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I have a small stock to share with you today. Meridian Diagnostics (VIVO) is having a nice day trading at $11.22, up $.83 or 7.99% as I write. Meridian did ALL of the things I like a stock to do...announced great earnings, declared an INCREASED dividend, and INCREASED guidance for the rest of the year. And NATURALLY, the stock moved up nicely today after the announcement this morning. According to the Yahoo "Profile", Meridian "...is a fully integrated life science company engaged in the development, manufacture, sale and distribution of diagnostic test kits, primarily for certain respiratory, gastrointestinal, viral and parasitic infectious diseases."
And what about those earnings? Well, sales for the quarter ended March 31, 2004, came in at $20.9 million, a 24% increase over the same period the prior year. Diluted earnings per share came in at $.15, a 15% increase over the prior year's same quarter. And they declared a cash dividend of $.10/share, an 11% increase over the $.09/share declared during fiscal 2003. In addition, they RAISED guidance from sales between $71 and $75 million, with earnings between $.47 and $.53 to net sales between $73 and $77 million, and earnings between $.50 and $.55 for the fiscal year ending September 30, 2004.
Hey I really kind of like this stock and NO I do not own any shares, but this is tempting!
Looking at a "5-Yr Restated" financials on Morningstar.com, we see that Meridian has been fairly steadily growing its revenue from $54 million in 1999 to $68 million in the trailing twelve months. Earnings have been a little less steady dropping from $.14/share in 1999 to a loss of $(.70)/share in 2001, then steadily improving to the current level of $.49/share in the trailing twelve months.
Free cash flow has been fairly steady and positive per Morningstar.com with $7 million in 2001, $8 million in 2002, $11 million in 2003 and $9 million in the trailing twelve months.
The balance sheet looks just fine, with $3.7 million in cash and $30 million in other current assets, plenty to cover the current liabilities of $15.0 million and enough actually to make a big dent in the $22.9 million in long-term liabilities.
How about valuation? Looking at "Key Statistics" on Yahoo, we see that this is a SMALL cap stock with a market cap of $166.79 million. The trailing p/e isn't bad at 22.9 and the forward p/e (fye 30-Sep-05) is better at 19.02. The PEG is at 1.89, making it a bit richer than dirt cheap, and the price/sales is also not bad at 2.27 but not cheap either. With the upping of estimates and current performance, we should see the PEG dropping based on current valuations.
VIVO has 14.86 million shares outstanding with 10.50 million of them that float. There are 143,000 shares out short as of 3/8/04, representing 5.5 trading days...or 1.36% of the float. And get this, with the $.40/share dividend, the stock is yielding 3.85%. Hey I think I am in love! The last stock split was a 3:2 in October, 1995.
What about a graph? Looking at a "Point & Figure" chart from Stockcharts.com, we can see that VIVO was actually trading lower until about October, 2002, when it broke through a resistance level at about $4.75 and has traded higher along its support line ever since! The graph looks great to me :).
O.K. I am finding it HARD to find anything I do not like about this stock. Well, there is the question of the price...I like stocks that are priced a bit higher...and also the small capitalization makes the stock relatively illiquid. But what the hey, otherwise looks great to me....now I DID promise to sit on my hands until I could sell something at a gain....so will try to maintain my self-discipline...but WOULD be interested in buying if that was available to me!
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