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Nordion Inc. Message Board

  • lorin1826 lorin1826 Sep 10, 2012 12:12 PM Flag

    Seeking Alpha article

    Excerpt from article:.......Our $11 fair value estimate is based on a discounted cash flow valuation of the business, but we also did a sum-of-the-parts valuation to identify the value of Nordion's various assets. Our-sum-of-the-parts analysis highlights the significant value of the firm's sterilization business, which we believe is worth about half of the entire firm's fair value. It is worth noting that the medical isotope business only makes up $2 of our valuation. We believe that one of investors' biggest concerns about the stock is the aging National Research Universal reactor and the uncertainty surrounding the future of that segment. However, even if the NRU reactor were to have further issues and halt production of Mo-99 and the medical isotope business were to be completely eliminated, our fair value estimate would still be $9 per share. Nordion is working to get its backup isotope supply in Russia up to full capacity by 2016, so we believe the chance of the segment being permanently worthless is very slim. We believe investors should be much more focused on the sterilization business and rapidly growing targeted therapies business.

    Sentiment: Strong Buy