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TMFHelical (98.78)

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.



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)

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