reasons why alan will deliver next week, page-8

Not sure if you folks have seen this....

Unilife Corporation (UNS.AX; $0.61/sh; Mkt Cap $275m) – Irrational sell down = buying opportunity – BUY PT $1.50/sh

•UNS share price suffered a sharp fall yesterday following the lead from the Nasdaq in the prior session. There were two main reasons for the sell down;
1.Negative article written in Forbes: http://www.forbes.com/sites/abrambrown/2013/09/04/how-is-a-329m-syringe-company-still-unprofitable-after-11-years/?partner=yahoomag
1.Analyst from another investment bank downgraded the price target (from US$7.5/sh to US$6 - still 100% upside), albeit retaining a BUY recommendation

•We remain perplexed by the sell off in the price and the associated high volume caused by these events, which have no bearing on the fundamentals of the business. The Forbes article in our view was more of a personal attack on the CEO, covering old events and providing a very unbalanced and bias view of the company. We can only speculate as to the timing and nature of the article.

The investment bank downgrade centred on the issue of delay in announcement of the contract and foregoing a conference call (which is taking place). Howe ever we believe that nothing has changed and expect an announcement as per our previous forecast which we anticipate could occur next week.

•We believe the sharp correction in the share price should be viewed as a buying opportunity for investors. The date for the Q4 conference call has been set for Tuesday 10th September (Wednesday morning AEST) followed by the Morgan Stanley conference which i scheduled the following day on Wednesday 11th September.

•With 10 deals still expected by calendar year end the coming months could provide a plethora of news/deal flow, which hopefully should commence next week. Should management deliver on their stated objectives this could be a transformation period for UNS and one which both sentiment and share price could change quickly.

•An interesting data point to note, is that there are ~18m short positions in the Nasdaq vs. an estimated free float of ~30m, if deals are announced and surprise on the upside there could be one large short squeeze. Maybe yesterdays volumes were used to close out some of those positions?

•We rate UNS a BUY with a 12 month PT of A$1.50/sh and recommend exposure leading in to the announcement of its first major supply contract.

http://www.fostock.com.au/announcements/unilife-corporation-uns-asx