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OSI Systems, Inc. Message Board

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  • bbandassoc bbandassoc Aug 15, 2012 11:50 PM Flag

    Taking a Short

    Not "trying" anything. Just new to the stock and initiating a dialogue. If I thought it were undervalued, I would be long. But, this one appears grossly overvalued and going lower. I shorted over $74 yesterday and close to $75 today. The Roth report gave me a chance to increase my short position today. Roth is a major (if not the major) OSI banker, so their analyst's opinion is not credible (especially since I have experience with Roth). Over time, this stock will settle down to where it belongs. If not, I will lose money. If it goes where I think it should, I will make a solid ROI. Time will tell. If you can tell me why it should go up from $74 though, I would appreciate it.

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    • bbandassoc:
      Your comment: "Personally, I think this is a sub-$50 stock on the merits."

      Can you please share with me what are the merits you refer to in the line above. Curious to see the rationale behind your decision. Thanks

      Good Luck

      • 1 Reply to tilong22
      • The metric that stands out to me is the multiple of sales at 2X. With sub-6% net margins, it would seem a multiple of sales of 1X would be more appropriate (since these are industrial margins), but maybe they deserve a premium for their growth rates and consistency. Still, maybe 1.25X? 1.5X? I bought ETN recently when it fell below $40. I realize OSI has some medical technology and ETN may not be a perfect comparable, but it's in the financial profile neighborhood of double digit growth, solid balance sheet and relatively low (industrial-like) margins.

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