>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.
>Misaligned incentives in healthcare
September 29, 2009
>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:
- Don’t wait for innovation
- Boost R&D and grab talent
- Start a company, the technology tools you need are cheap
- Make innovation central to your business
- 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.
>Dice Holdings Up 70%, but There is Upside Still Left
September 23, 2009
>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.
>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
>FSC No Longer Recommended as a BUY
September 21, 2009
>Our Dallas presenter no longer recommends Fifth Street Financial (NYSE: FSC) as a Buy. The stock is currently trading at $11.04, very close to his target. The company received a $50 million credit facility from Wachovia a week ago. Fifth Street Financial has been approved for an SBIC license, but it hasn’t been formally granted yet. Business trends are improving. Still, the presenter has significantly reduced his position and is no longer recommending the name to new investors.
>EMS Stable Name with Some Upside
September 18, 2009
>EMS has moved 50% since our Dallas presenter recommended the name in June. He purchased more shares in mid $40’s, just below the current price. It’s no longer an aggresive buy, but if investors are looking for a stable name with a bit of an upside, EMS certainly fits that criteria. The company raised it guidance by 15% on the last earnings call. The presenter’s target is mid $50’s, based on 8-9 times next year’s EBITDA.
>Roulston’s Consumer Chair on Bloomberg and Fox
September 17, 2009
>Craig Johnson, President, Customer Growth Partners and the chair of our Consumer Community is a frequent contributor to Bloomberg, Barron’s, WSJ and other media outlets. In just the last two days, Craig could be heard and seen on Bloomberg Radio and Fox, giving his perspective on August retail sales, consumer spending, on the recent Best Buy quarterly release. Craig remains unconvinced that we’re witnessing a consumer recovery. He believes only the value end of the retail spectrum is seeing some uptick in spending.
Craig’s latest Fox appearance can be accessed at
http://www.foxbusiness.com/search-results/m/26433794/is-the-consumer-really-back.htm
The Collaborator 