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Trinity Biotech plc (TRIB) Message Board

  • faulknkid faulknkid Nov 28, 2002 12:16 AM Flag

    sigma blowout sale

    seems sigma is blowing out short expiration products sitting on the shelf.

    http://www.sigmaaldrich.com/Brands/Diagnostics.html

    I wonder if TRIB benefits from this? Did it lower their purchase price? Does the sales of these products go to TRIB? Or is Trinity getting a line of products where the cutomers just loaded up their shelfs up on dirt cheap products.

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    • IMHO - three things! The latest purchase, the coverage by Dutton, which has buying ahead of it fully putting TRIB before a huge investor base, and something about to happen that we haven't seen yet. Anytime you can buy this under $2-3 you have a deal!

    • Historical Trib the stock price goes up, for no reason, then the announcement then the fall back. In this particular case no fall back hence somethings up!

    • faulknkid:

      You are raising a question that I've tried to raise on this board in the past. Is TRIB basically buying a bunch of low-margin commodity businesses that will grow revenues without increasing EPS?

      The supporters' argument is that the recent purchases make a big difference and that the forever delayed AIDS test make this a sort of sleeping "micro-giant."

      My argument is that this company may be a mild value play but organic growth is preferred on the street these days. Growth through acquisitions scares people because it means quarter-to-quarter earnings are never really comparable or transparent until the acquisitions stop for a while.

      My "opponents" on this board corrected me several weeks back by reminding me that the stock price has rebounded with the NASDAQ. Fine, let me turn their argument on its head. . . if this were such a terrific buy, why hasn't performance done better than the NASDAQ?

      In short, I've come to the conclusion that Yahoo! boards differ vastly by stock. Some have vitriol regarding the company or public events. Some have balanced discourse. This board is habituated by "True Believers" who seem unwilling to understand the notion of a rational market. If TRIB has low value and low PE, it may be that the market sees a low profit margin concern. Remember what Danny De Vito said in "Other People's Money," At some point somebody made a helluva buggie whip."

      Best,


      Howie

      • 2 Replies to Howie58
      • while i appreciate your perspective and your civility, i really don't see any substance behind what you are saying. i am no "true believer" in this or any company, but your positions just don't make a lot of sense to me for several reasons.

        particularly, the idea that "the street" even has a perspective on TRIB at all. this company is not, nor ever has been (to my knowledge), covered by a Wall Street firm. for your "efficient market" perspective to be relevant here, IMHO, TRIB would need to have a visibility level on Wall Street and to investors in general that is just doesn't seem to have. in many ways, although TRIB is obviously public, it trades with the illiquidity and erratic valuation of a privately held company. i think this is because most investors, particularly the big money kind, just don't know about TRIB (or don't care because it is too small).

        also, there was a lot misperception about this company being a "one-trick pony" as far as the HIV test. i think that caused some speculation in the stock during the mania, which has ultimately led to the current depressed valuation.

        if your points about TRIB's business being inherently of limited profitability and that as the reason for its valuation in this "efficient market" are true, how do you explain the ridiculously high valuation of OSUR relative to TRIB? OSUR has a balance sheet from hell, it is losing money (and always has), and it has fewer products than TRIB and no real growth. yet, its valuation is about 7 times that of TRIB. i think OSUR's valuation has nothing to do with its fundamentals and everything to do with its coverage by Wall Street "analysts" (promoters).

        if TRIB could ever position itself to get the same kind of attention as OSUR, its valuation would be dramatically higher, with no change at all in its fundamentals. that is my view. it obviously is in direct opposition to an "efficient market" theory. in my view, that theory is very from being credible after the bubble we went through in 1999-2000. the flipside of saying TRIB is currently at its valuation due to an "efficient market" would be to also say that Yahoo! really was worth $250 per share at one time. I'm sorry, but that seems more like a fairy tale than an economic theory to me. and i happen to have an advanced degree in economics.

        where we do agree is that TRIBs management has failed. they have failed to properly manage the stock and the company's visibility with investors. as far as running the company, i think they are doing a pretty good job.

        Regards,

      • What on earth gave you the idea that this was a "rational" market? Which is the "true" NASDAQ valuation, 5000 or 1100? The "market" today proclaimed 1478 to be just right but I'm sure Monday will bring about a new consensus. The "true" value of any enterprise is determined by comparing the return generated by that enterprise in relation to the return generated by the mythical "zero risk" investment. The succesful investor recognizes this and uses irrational market valuations to make money.

 
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