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Biotech / Medical : TECHNE (Tech): "selling picks to gold miners" -- Ignore unavailable to you. Want to Upgrade?

To: Shane M who wrote (23)	4/1/1999 5:36:00 PM
From: dr.john	Read Replies (1) \| Respond to of 47

Shane, Tech is expected to earn about 0,78-o,8 USD/share in FY 99 and about 1,o in FY2000. However, if we exclude the extraordinary one-time items related to goodwill amortization this year, Techne's operating results were extremely strong, actually stronger than in the past: For the 6 months ended Dec 98 they reported net income of 7,1 mill ('97: 6,3 mill) including the extraordinary item of 4,7 mill in 98; Let's add 3 millions of these 4,7 to the bottom line and the "real" net earnings might have been somewhere at 10 million, i.e a surge of over 60% ; there are 5% more shares outstanding, but it still comes down to a EPS of 60% higher than in 97. Let's make it 50%. This is a higher growth rate than in the past, and for the reasons outlined in our older postings I think it will apply for the remainder of this year and, likely, for the next year as well. Which translates into a "corrected" EPS of about 1,15 for FY,99 and of 1,5 in FY2000 (if you assume a growth rate of 30% only), or of 1,7 (if you assume a growth rate of 50%). Lets take the lower number (i.e 30% growth for 2000, apply a P/E of 30 and you have a share price of 45. Of course, the target price would be much higher, if you take the higher numbers, or award a higher P/E (which Techne deserves: industry leader, superb past history, excellent fundamentals, excellent balance sheet…). Well these are just my thoughts.