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View Full Version : Value Stock: VNUS, Good buy or trouble?

11-15-2005, 05:40 PM
I recently came across VNUS in a screen I ran. It's a medical devices company with a 1000M market cap. It seems to have positive, growing earnings, no debt, and half its market cap is in cash and cash equivalents. On the other hand, it recently missed its revenue projections and guided down for the year. Is this just a cash heavy stock that is struggling to grow, or is it a value long term? Any value oriented investers want to rip it apart?
Matt
buffett
11-15-2005, 07:45 PM
Even with all that cash and the stock down over 50% from its high, its EV/EBIT is still ~10x, so I don't think you can call this ultra-cheap/a no-brainer/cigar butt/net net.

So you'll need to have a good idea of the sustainability and level of future cash flows, and for that you have to have a good understanding the competitive framework. Some questions I can think of off the top of my head.....

how much does vein stripping cost?
how much does vnus' rf thing cost?
does vnus have patents?
what other alternatives to vein stripping are there?
is all or part of the procedure covered by medicare?

Of course, it may be very easy to find the answers to these and other questions just by reading the S-1 and 10-K. But I don't want to do that, because this is outside my circle of competence.
Sniper
11-15-2005, 09:33 PM
[ QUOTE ]
...reading the S-1 and 10-K. But I don't want to do that, because this is outside my circle of competence.


[/ QUOTE ]

I'm fairly certain you didn't mean that you were not capable of reading a 10K?
buffett
11-16-2005, 12:48 AM
[ QUOTE ]
this is outside my circle of competence.

[/ QUOTE ]

"this" =/= reading SEC filings

"this" = analyzing a medical company with one product that treats vericose veins

PS
is there an established way to denote "not equal to"? "<>", maybe?
xtravistx
11-16-2005, 02:04 AM
[ QUOTE ]

PS
is there an established way to denote "not equal to"? "<>", maybe?

[/ QUOTE ]

From my programming experience, it was always "!="
krishanleong
11-16-2005, 11:26 AM
[ QUOTE ]
[ QUOTE ]

PS
is there an established way to denote "not equal to"? "<>", maybe?

[/ QUOTE ]

From my programming experience, it was always "!="

[/ QUOTE ]

<> is Visual Basic
!= is Java and C++

For a non-programmer your =/= was remarkably clear.

Krishan