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Author: NorthCarolinaKen Big red star, 1000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 71  
Subject: Re: LCI what's up Date: 11/13/2004 11:53 AM
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I did read the Forbes article. It was the issue with the top 200 small cap companies in the US and Lannett was number 3. It was also down some 40% from its highs. Issue, shrinking margins due to competition. I did my due dilligence and then bought the stock. And, as you say, it dropped 20% on the earnings report. Reason (I think), continued margin erosion on a stock with light float. A few institutional sales will move a stock like this a lot of points and of course they operate on a quarter to quarter basis.

My reasons for buying the stock were: I didn't own any generics and wanted some representation in my portfolio; the baby boomer argument; sales look to be growing steadily. For a growth stock, I want to see sales increasing. Margins and net can float all over the place on a quarterly basis but ultimately, growth is based on sales increases. The Forbes recommendation is actually mixed for me. All of the big financial magazines tell you what is known and believed on the Street. In particular, in spite of their comments about forward looking, they are not but rather a consensus view of the professionals, not a good place to get ideas.

I am not doubling down on the stock although I continue to like it. I have learned the hard way that doubling down on a falling stock turns out badly more often than not. You have to figure that the other folks may know something you don't. I am holding here though.

Ken
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