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Biotech / Medical
TECHNE (Tech): "selling picks to gold miners"
An SI Board Since January 1999
Posts SubjectMarks Bans Symbol
46 4 0 TECH
Emcee:  dr.john Type:  Unmoderated
TECHNE (TECH) (21 USD; H/L 21,5/12,5)

Techne, the worldwide leading supplier of cytokines and related products to the medical research and diagnostic market, has an outstanding track record of being highly profitable, growing EPS in excess of 25% as far as you can track back (over10 years), is debt-free and is in its strongest position ever to fully participate in the fast-growing market of cytokines in medical research and diagnostic. Due to the recent acquisition of its most important competitor, the Genzyme biotechnology division, Techne's market share increased from about 40% to 50%. Most of its remaining competitors are either very small companies, or are small divisions of bigger companies, (such as Beckmann-Coulter). Technes management (which owns about 12% of the outstanding shares) is very modest, "no-nonsense", and is always keeping an eye on a clean balance sheet (debtfree, siginficant cash on hand).

Cytokines are intracellular messengers involved in a infinite variety of disease mechanisms. The importance of cytokines in the pathogenesis of immune diseases, infections, cancer, and other diseases has been increasingly recognized, and research focusing on cytokines is exploding, a trend which is bound to become even more pronounced in the years to come. Techne is increasingly selling its products not only to (government-) hospitals, but more so to private and public traded pharmaceutical and biotechnology companies. Techne has been steadily increasing its margins, with gross margins being well over 50 %. Margin expansion has been possible due to a shifting of the sales mix towards higher-margin products, due to higher production-volume, and due to reduced royality payments to Amgen (from which it bought the Amgen cytokine division in the early 1990's). The addition of Genzyme's cytokine division allows not only to gain market share and offer a bigger variety of products, but also to add about 4000 customers, most of which had not been Techne-customer before, and many of which now buy a wider array of products than before, because of the much richer offering of the combined Techne/Genzyme cytokine-products. The Genzyme acquisition is dilutive to FY 1999 earnings, because of amortization of goodwill and inventory, and FY'99 EPS were supposed to be somewhat below those of FY 1989 (0,77USD/share). However FY 99 started very strong (EPS (before extraordinary items) surging over 60%; EPS (after extraordinary items) 5% over 98's EPS). Techne therefore continues to exceed consensus estimates and its own expectations. At first glance Techne might appear to be fairly valued at 21 USD. However, despite its excellent fundamentals and track record and promising future, this company is still little known, a fact which should change in due time. Historically, Techne traded at a P/E between 21-40. Looking into FY2000-earnings, which will not be distorted by the Genzyme acquisition, we can expect EPS of about 1 USD/share. Applying a multiple of 30, which is conservative, relative to its peer group, yields a price of at least 30USD for the next 12-18 months. COMMENTS, PLEASE?!
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46Earnings report today was not real thrilling to me though the stock price rose 2Lance Bredvold-May 1
45Since I'm using this board as a place for thoughtful personal reflection, I Lance Bredvold-10/1/2023
44And then too, I was surprised to see the price of CCXI showing up in GAAP, but aLance Bredvold-8/4/2022
43Good results today showing $6.63 EPS GAAP for the year and $7.89 adjusted. I noLance Bredvold-8/4/2022
42the whole space is getting hammered. not sure they are cheap yet, but keeping anmopgcw-6/23/2022
41I'd been wondering about that investment in CCXI by TECH and am interested tLance Bredvold-6/13/2022
40There is another option which I wish I'd thought of earlier. I had been plaLance Bredvold16/12/2022
39Today the market is down nicely but well above the 80% of the S&P500 high (4Lance Bredvold-6/9/2022
38After 12 years with no posts, one might think TECH was defunct. Actually it hasLance Bredvold11/13/2022
37Chuckle. That is why I got a kick out of MYGN's recent CC where they are posmopgcw-2/4/2009
36Yesterday they showed they are economically sensitive after all and someone dumpkeokalani'nui-2/4/2009
35Techne - TECH-NNM Outperform - Price 66.20 on Jan. 29 by Baird Securities Tecmopgcw-2/2/2008
34Techne Corporation Releases Unaudited First Quarter Results for Fiscal Year 2007mopgcw-10/27/2006
33Techne helps finance biopharmaceutical company Friday August 25, 4:12 pm ET Temopgcw-8/26/2006
32Techne Corporation Releases Unaudited Fourth Quarter Results for Fiscal Year 200mopgcw-8/8/2006
31This stock is starting to move. Any interest out there? Nice gain Friday, up +somethingwicked-9/24/2000
30I'm surprised that this board doesn't have more activity, considering thDavid GarrisonD-6/30/2000
29 New Highs today anyone still in with any new info?Smartypts-6/15/2000
28 Talking about TECH: Message 11093077Walter Morton-8/28/1999
27 Such a beautiful investment-case and such a silent board........ Go back to msdr.john-7/30/1999
26 Shane, It is the same music, indeed. But then, the story about Techne is very dr.john-7/6/1999
25 Dr. John, This sounds an awful lot like you. <g> (from IFC here on SI) Shane M-7/4/1999
24 Shane, Tech is expected to earn about 0,78-o,8 USD/share in FY 99 and about 1,dr.john-4/1/1999
23 Dr. John, I agree with your @ $30 fair value for TECH. What has prompted you Shane M-3/31/1999
22 Mike, Sit back and enjoy TECH! Look at older posts in our thread: they tell ydr.john-3/31/1999
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