massacre, page-27

Caketin I agree with your comments. A company would not be spending $10m to improve processes if we arent going to substantially increase our margins unless they are extremely bad at running a business (of course some of you may be thinking they are but they arent that dumb). If you read between the lines, there is still no other generic other than the AG so what they are saying is that the sales of Fonda will continue for quite a while but now at hopefully a similar margin as expected prior. If they are spending $10m to improve margins then in the long run if there is no other Generic then sales will continue and profits will flow for a long long time. Even at a 6 cent dividend it indicated we are looking at a yield currently of 12% so really the price would reach 0.65 to 0.70 based on those dividend figures.

The mark down of the price today was simply those that have been following ACL being unimpressed with the numbers and getting out. We will now see other buyers coming in as they can now see the company is starting to make money and therefore no more cash burn, a dividend and a potential to extract value from Oncology.

I think it is time to increase my exposure.