USL vs. USO Continued
Here’s a more in-depth–though, still brief–article on the differences between USL and USO. Apparently, contango is the term used to describe the strategy of rolling over current month’s futures to the next month’s futures.
Archive for April, 2009
Biovail
Biovail Corporation is a pharmaceutical company engaged in the formulation, clinical testing, registration, manufacture, and commercialization of pharmaceutical products principally in the United States and Canada. The company focuses on central nervous system disorders, pain management, and cardiovascular diseases.
- Market Cap: $1.66B
- Enterprise Value: $1.38B
- Trailing P/E: 8.39
- Forward P/E (fye 31-Dec-10): 8.61
- Revenue (ttm): $757.18M
- Gross Profit (ttm): $560.01M
- EBITDA (ttm): $329.78M
- Net Income Avl to Common (ttm): $199.90M
- Diluted EPS (ttm): $1.25
- Trailing Annual Dividend Yield: 13.1%
- Payout Ratio: 90%
- Beta: 0.65
Its products include:
Xenazine — chorea associated with Huntington’s disease
Wellbutrin XL – depression in adults
Ultram ER — chronic pain in adults
Zovirax Ointment — management of initial genital herpes
Zovirax Cream — herpes labialis
Cardizem LA — blood pressure control
Tiazac/Tiazac XC — treatment of hypertension and angina
Wellbutrin SR — depression
Zyban — smoking cessation treatment
Monocor — hypertension and congestive heart failure
Retavase — tissue plasminogen activator used in thrombolytic therapy
Glumetza — hyperglycemia in adult patients with non-insulin dependent and mature onset diabetes
Ralivia – management of pain
Nitoman — hyperkinetic movement disorders, such as Huntington’s chorea, Hemiballismus, Senile Chorea, Tic and Gilles de la Tourette Syndrome, and Tardive Dyskinesia
The Company is headquartered in Mississauga, Canada.
TECH – Techne Corporation
Techne Corporation (NASDAQ: TECH) is a mid-cap company (2.02 B) with its headquarters in Minnesota. Techne and its subsidiaries develop and manufacture biotechnology products. Specifically, the company is comprised of three operating segments: Biotechnology, R&D Systems Europe, and Hematology.
Biotechnology
The Biotechnology division develops, manufactures, and sells biotech research and diagnostic products world-wide (except Europe.) This segment is currently responsible for 64.4% of Techne revenues which grew by 13% in fiscal 2008 primarily as a result of increased volume.
R&D Systems Europe
The R&D Systems Europe segment simply distributes the Biotechnology division’s products throughout Europe. This segment represents 29.4% of Techne revenues and grew by 22.6% in fiscal 2008. Whereas approximately 10% of this growth was due to the strengthening Euro, this segment’s sales growth was a solid 12.2% outside of the effect of currency fluctuations.
Hematology
The Hematology division develops and manufactures hematology (blood physiology) controls and calibrators for sale world-wide. Currently, this division only represents 6.2% of total revenues. However, like the other divisions, hematology experienced a growth of 6.1% in the fiscal year.
What drives growth at Techne?
New Product Development: Techne introduced 1,439, 1,540 and 1,390 new products in the fiscal years of 2008, 07 and 06, respectively. Releasing such a large number of products ensures a steady, cumulative revenue stream; if a few products are “duds” they are offset by the “home runs” that are also found in such a vast offering.
Product Life Cycle: On average, a product takes 4-7 years to mature and then experiences a slow growth over several decades. This creates a compounding effect where Techne not only brings in revenue from new products, but also existing products as well. Further, Techne has proven growth after the life cycles of its first products produced after its inception (1981) have expired.
Investing in What They Do Best: Year after year, Techne increases their spending on research and development, eschewing investment opportunities outside of their strategic expertise.
What Do the Numbers Say?
Summary
Techne is a proven leader in their industry. They maintain strong cash positions, hold no long term debt, and continually reinvest in research and development that will only increase their scientific knowledge and/or open new markets. The product life cycle of Techne’s products is incredible and is providing them with the opportunity to profit off of their existing products and continue to produce more and more. They’ve already proven that they can grow to stay ahead of the trailing end of the life cycles – which likens their growth to a snowball rolling downhill. Additionally, Techne offers diversity to our portfolio as we currently have no positions in the Healthcare sector.
ECLP – Eclipsys Corporation
Eclipsys Corporation is a provider of advanced integrated clinical, revenue cycle and performance management software, and professional services that help healthcare organizations improve clinical, financial, and operational outcomes. It has developed and licensed software and content that is designed for use in connection with many of the key clinical, financial and operational functions that healthcare organizations require. It also provides professional services related to its software. These services include software implementation and maintenance, outsourcing, remote hosting of its software, as well as third-party healthcare information technology applications, technical and user training and consulting. It markets its software to healthcare providers of many different sizes and specialties, including community hospitals, large multi-entity healthcare systems, academic medical centers and physician practices. In January 2009, the Company acquired Premise Corporation.
Looking at ECLP against similar companies like CERN. ECLP looks like it is poised for growth and growing. See the income statement that I like so much:
http://www.google.com/finance?fstype=ii&q=NASDAQ:ECLP
Also its P/E suggests that it is a much better value right now. P/E of ECLP 5.40 vs P/E of CERN of 18.32. In fact last year ECLP had a net income of 99mm on a revenue of 515mm where CERN had a net income of 188mm on a revenue of 1676mm suggesting that they have better operational margins.
We believe this stock is a play to take advantage of the clear push towards heatlh care modernization. As an IT solutions provider in this space we believe this stock could garner a windfall over the next few years.