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ERBA Diagnostics, Inc. Message Board

  • doctorsnowman doctorsnowman Nov 14, 2013 1:21 AM Flag

    ERB vs. OPK and current ERB valuation. OPK 50x higher than ERB. Maybe ERB is undervalued? You think? Based on OPK ERB is worth $70.

    Similarities - Both ERB and OPK were founded by Dr. Frost with similar boards, location... Both are medical diagnostic businesses and have already and plan to make more acquisitions. Both demonstrate growth. Both had their current chairman and majority stockholdes invest significantly in and continue to invest in their respective stocks.Both Suresh and Dr. Frost own controlling interests in their respective OPK and ERB companies. Both have many medical diagnostic products.

    It is very reasonable to use OPK as a comp for ERB. OPK trades at a valuation of close to $3.5B while ERB trades at a much lower valuation of $68M. You read that correctly. OPK is roughly 50x higher or worth 50x ERB.

    There are differences between the two. But many of the differences are not what you would expect based on the vast valuation disparity.

    Shares - OPK has a much larger float and shares outstanding than ERB.

    Profits - OPK loses money. ERB makes money.

    Size - ERB has total revenues around half of OPK. So while ERB has 50% of he revenues or size of OPK, OPK trades for 50x as much. Does not make a lot of sense? If you include all the ERB Group companies (that will likely be consolidated soon) ERB is much much larger in revenues than OPK. The ERB group has sales in the hundreds of millions while OPK does less than 100M.

    ERB Group has far greater distribution than OPK with distribution in 70 different countries.

    Not saying OPK is fairly valued one way or the other. But the OPK price I imagine reflects the market. It should be simple to se ERB is in no way trading at a reasonable value.

    This can partially be explained by understanding that ERB has not yet made the effort to communicate with wall st. other than issuing quarterly earnings press releases. ERB is a turnaround and a growth story that has not yet been exposed widely. That is changing as the news is favorable.

    ERB trades thinly and price is determined daily. The float has not changed. Current price makes little sense.

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ERB
2.0701-0.0399(-1.89%)Jul 29 4:00 PMEDT

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