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Author: gliberty Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 71  
Subject: LCI what's up Date: 10/19/2004 1:21 PM
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I have owned this stock for awhile. The revenue and earnings continue to grow, so why is the stock price so flat. Am I missing something?
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Author: LakeEffect Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 51 of 71
Subject: Re: LCI what's up Date: 10/19/2004 9:32 PM
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Am I missing something?

I don't think so. The drug sector in general has been getting hit hard, and the aborted Perrigo buyout this summer certainly didn't help. I continue to hold, as I think the shares are a good value under $14. I do wish I had sold in the mid-$20's though.

On the bright side, the Forbes article this week naming Lannett #3 best small company in America seems to have generated some interest today.


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Author: gliberty Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 52 of 71
Subject: Re: LCI what's up Date: 10/20/2004 1:55 PM
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Thank you LakeEffect. I think I will continue to hold, as I am PFE and ELAB. I understand the elections will result in some sort of action regarding the pharm companies, but think they are already valued for that, at least that is what I am hoping. In the long run healthcare and medical services have got to be a growth industry.
Is it that LCI ownership is so narrow that it doesn't seem to track with financial results? Or is it just the markets general reaction to pharm stocks.

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Author: LakeEffect Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 53 of 71
Subject: Re: LCI what's up Date: 10/20/2004 11:07 PM
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I wish I knew the answers! :)

I think it's a bad time for pharmaceuticals in general. Both the political and economic climate are tough for drug companies right now. And a small cap like Lannett can swing wildly with relatively little action.

Plus, the whole Farber/Perrigo buyout arrangement was handled extremely poorly this past summer. Farber is an octagenarian, so we shareholders need to pay attention to the inevitable changing of the guard.

I am in agreement, though, that health care and pharmaceuticals are growth industries as the baby boomers age. I suspect generics will play an ever-increasing role as costs become a more important issue.

So for now I hold and watch....

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Author: Varie Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 54 of 71
Subject: Re: LCI what's up Date: 11/9/2004 4:16 PM
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...why is the stock price so flat...


Flat would be good! What on earth caused this stock to plummet 23% today? Not only the Forbes article but their quarterly report looked good to me.

Betty

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Author: gliberty Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 55 of 71
Subject: Re: LCI what's up Date: 11/9/2004 6:45 PM
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Betty, I didn't read the Forbes article, but was not impressed by the earnings report. Their sales were up slightly, but they had very large increases in expenses for selling and administration, R&D, and plant and equipment.
I hope the R&D gets some new products on the market quick. I have owned the stock for awhile, and am disappointed in this years performance. Don't know what to think about management.
The 4 million shares they gave for a marketing arrangement had a dilution impact on the earnings per share. Hopefully it will pay off.
I might be a buy at this price.

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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: 56 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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Author: gliberty Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 57 of 71
Subject: Re: LCI what's up Date: 11/18/2004 8:16 PM
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Thanks for your post. There is something strange about this stock. Maybe that it seems to be narrowly traded. I don't know. I will continue to hold what I have. Maybe increasing would be a good idea at this price. I also own ELAB, they have had their ups and downs, but have been a good investment for me. I agree generics are a part of the health care industry that is hard to ignore.

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