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  • therealintellectual therealintellectual Jan 30, 2011 10:04 PM Flag

    Accounting activities over last year

    This is what I found in yahoo old earnings details:

    Estimates (Dec)

    (US$) 2008A 2009A 2010E 2011E 2012E
    EPS (1.55) (1.51) (0.75) (0.66) 0.36
    GAAP EPS (1.55) (1.51) (1.28) (0.66) 0.36
    Change (YoY) -64.9% 2.6% 50.3% 12.0% NM

    Free Cash Flow Yield* -9.6% -10.3% -7.5% -8.8% 0.6%

    Observe that free cash flow yeild stays almost the same but EPS change YOY changes from -65 to +2 and then to +50.

    Though I have been trading and doing swing trades over the last few years, I have never went very deep into any stock as to exactly zero in to see how they were performing accounting and what exactly are the long term prospects. Main reason was a long term holding from my perspective was about 1-2 months.

    But now I see every where analysts, people, investors etc tooting horn about SVNT. Being a pharma stock, if I want to put money in, I'm sure I shouldn't expect returns soon. So, I wanted to research it first. This was the first thing I noticed, and wanted to ask some of you longterm bulls as well as shorts/bears... what is to be interpreted out of this. Do, you know of or aware of any one time items that were applied to earnings in 2010?

    The main reason I'm concerned about is I know that SVNT put itself up for sale. I'm aware that many companies from an accounting perspective would want to skew the numbers a little to make it look rosy as if the company started making profits etc. Is this big change in EPS change a similar thing or did they have any sales to go with it?

    Please respond with certain constructive analysis.

    Thank you.

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