Sometimes I wonder what is the point of all of this buying and selling....what makes our approach here any different than Malkiel's (the author of Random Walk down Wall Street), is that I don't think that stock prices over the long term are random. I do think that underlying fundamentals of a stock are what determine its ultimate value. Anyhow, enough philosophizing....I just wanted to share with you some of my thoughts.
Abaxis, Inc. made the list today. This is a small company that may have a lot of room to grow. Although up stronger earlier today, it is still currently trading at $13.40, up $.39 on the day or 3.01%.
According to money.cnn.com, Abaxis (ABAX) "...develops, manufactures and markets portable blood analysis systems for use in any patient-care setting to provide clinicians with rapid blood constituent measurements." By the way, I do not own any shares of this company.
On July 31, 2003, ABAX reported results for their first quarter 2004 period ending June 30, 2003. Their quarterly revenue was $10.3 million, a 39% increase over the same period last year. Diluted earnings per share were $.04 vs a loss of $(.02) last year.
Morningstar.com shows revenue of $13.3 million in 1999, $23.4 million in 2000, $29.8 million in 2001, $30.6 million in 2002, and $34.8 million in 2003. Extrapolating the current quarter revenue (without any sequential growth) would get us to $40 million for 2004.
Free cash flow has improved from $(9.0) million in 2001, to $2 million in 2002 and 2003.
The company has an excellent balance sheet per Morningstar.com with $10.4 million in cash and $13.1 million in other current assets. This is balanced against $5.7 million in current liabilities and $7.5 million in long-term debt.
This is a small cap stock with a market cap of $231.5 million. The trailing p/e is enormous (since the company JUST turned profitable) at 162.61. Price/sales also high at 5.74. There are 17.21 million shares outstanding and 16.7 million that float. Only 109,000 shares are out short as of 8/8/03. No dividend is paid.
This is a very nice stock and might deserve a place in your stable. (I always think of stocks as sort of race horses....occasionally they break a leg and out they go.) The stock isn't cheap but it isn't easy to find these small fast growing firms with clean balance sheets. (imho).
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