>LabCorp a Good Value at $66

September 30, 2009

>Our Dallas presenter highlights LabCorp’s (NYSE:LH) excellent cash flow characteristics and steady if unspectacular growth in top-line. The company’s nationwide lab network gives it a clear scale advantage compared to small regional players. As the move to preventative care and personalized medicine gathers pace, LH is very well-positioned to grow its operations. Specialized testing, where prices are a level above regular diagnostics, already comprises over a third of the company’s total value and that ratio is poised to increase going forward. Margins are impressive, but recently implemented automation initiatives will further boost LabCorp’s bottom line. The presenter’s target range is $85-$90, based on historical EBITDA multiples.


>A Roulston Research technology and healthcare expert has an interesting take on the slow pace for adoption of electronic health care records. He believes that electronic records are not more widely used simply because no one that would use them actually wants them.

Doctors want they very best care for their patients. Pen and paper are very easy to use, allow for accurate notes and are excellent means with which to communicate. The electronic screen makes it harder to take notes, harder to accurately record the specifics of the ailment and harder to use to communicate with colleagues.

Hospitals want to find more revenue streams. More precisely, hospitals only want them for one reason: To direct patients to their in-house pharmacy. Giving patients a paper prescription allows them to walk out and have it filled at their local drugstore.

Our expert believes that this situation is just one example of misaligned incentives in the healthcare space.

>Coinstar concerns

September 29, 2009

>Presenter of company and others cite CFO exit and lack of transparency of company on recent asset sale and other issues as reasons for lightening up on positions. A lot of concern here that the company has interesting strategy but transparency during this kind of transition and MCD seeming very cheap sale of position creates concerns.

>Dallas visit

September 25, 2009

>Contacts continue to believe pricing just wont change as we go into colder months any more than seasonal adjustments. Now with all new oil finds even more compelling that oil is coming down to historic ratios rather than gas going up. These are locals that might be very close to the trees but they are feeling strongly that a lot of natural gas reserves and needing to be drilled on leased land.

>Five Tips for a Recession

September 24, 2009

>Bart Perkins, the Chair of Roulston Research’s technology expert community, recently attended a venture capital lunch forum where an editor from WIRED magazine gave a presentation entitled “Five Tips for a Recession”. They were:

  1. Don’t wait for innovation
  2. Boost R&D and grab talent
  3. Start a company, the technology tools you need are cheap
  4. Make innovation central to your business
  5. Think like a VC

He used Apple and Dell as examples for #2. During the last recession, Apple grabbed talent and continued to pursue an aggressive R&D program. Dell cut these expenses in response to the economic conditions. For #3, his examples were cloud computing and open source software. Both models have drastically reduced the need to purchase, run and maintain your software. And for #5, his point was that while big companies will kill projects with a 70% chance of failure, VCs will gladly accept a project that has a 30% chance of success.

>Our Boston presenter is still very bullish on Dice Hodings (DHX:NYSE). The stock is currently trading at $6.83, a 70% increase from $4 where he recommended the name back in May. This leading provider of online recruitment services is just starting to see a turn in online employment listings, the development which won’t show in the results for another 1-2 quarters. The company’s platform is a category killer and with the stock trading at 10x its trough EBITDA, 6 times midcycle EBITDA, there is still significant upside left.

September 22, 2009

>At at our last Dallas Small Cap idea forum in June we had 5 stocks presented. One presenter never made it during the horrendous downpour. The five stocks presented(recommendedprice,current price) were;

EMS ($33.89, $47.51)

BLC ($2.02, $4.57)

MIM ($8.36, $13.60)

LFUS ($19.63, $28.07)

FSC ($8.98, $11.17)

Needless to say since June 11 the markets have done well but this is remarkable