TMFHelical (99.03)

Should have let a winner run

January 30, 2007 – Comments (0)

I wrote a couple of times in the past about Molecular Devices. Originally I wrote a take after they dropped precipitously following a guidance downgrade. The company had good products, wasn't overly expensive, and had a clean balance sheet. So I thought there was an over-reaction and went bullish in CAPS. I did not buy in real life.

This was correct. But....

I banked accuracy when it was up 5+points. I thought point made, and this time I was correct. There was no good reason to sell it off. I speculated that they might be an attractive takeover candidate, and that is what happened. I would have a far better score if I had stayed with it.

The heck with banking accuracy, buy good companies at good price points and stay with them. In CAPS and in reality.

http://www.f...devices.aspx

http://www.f...cquired.aspx

Now MDS is an interesting animal. They are reorganizing business units, but still it is unclear what they will become. There is not a lot of synergy in the business units. I would not be shocked to see the pharma CRO business or split it out. Certainly profitability needs to improve in this unit for it to be a worthwhile investment.

Ralph (Zz)