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Abaxis, Inc. Message Board

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  • dontdropyourlunch dontdropyourlunch Jan 6, 2011 11:18 AM Flag

    Sales Force on Human Medical Placements

    Even though ABAX is low volume on a daily basis, is this approximately 10% selloff in the past 30 days just technical after the big runup or is there something fundamental causing it? Earnings should be coming in a few weeks.

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    • The problem with ABAX is that there is continual dilution of the shares - 10 years ago, the issued share cap was 10 million shares, now there are 22 million.

      Like most US Corporations there is poor money management,they have $100 million in cash, which brings no return - that's 15% of the mkt value of the company.

      They had the opportunity to buy shares in the market at $15, but just sat on their thumbs. If they had bought 50 million worth, they would be sitting on $50 million profit.

      If they had used Treasury stock for bonuses, they would have EPS close to $1.75 and the stock would be trading round $65. EPS growth would be strong?

      If they needed money for anything, they could go the market or a private placement, and at $60 a share that's a lot cheaper, and there would be no dilution

      Really poor Treasury Management, but this appears to be the norm for many cash rich companies.

      They need to look at the big picture rather than saving pennies here and there.

      I believe, we need an injection of life into the board, and trim back the bonus plans for not achieving very much. My admiration goes out to the front line and production people, who are doing a difficult job in tough economic times.

      Maybe the benefits of the new production lines will kick in, and ABAX will clinch some more multiple accounts, but I believe nobody has their eye on the ball regards Treasury.

 
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