4 + signs & 1 - sign from the half yearly

1. Scale of economy is emerging.

Marketing & admin exp as a % of revenue is 37.6% for 20091H. This is the lowest since 2001 (no data berfore that). Back in 20051H, the % is 77%. I expect this ratio continues to drop and as a result the increase in profit to accelerate.

2. Sales in Europe start to catch up

In $ terms, 25.9% of revenue comes from Europe in 20091H. It was 17.8% and 13.7% back in 20081H and 20071H.

3. Underlying EPS of 20 cents (exclude legal & FX)achievable based on the momentum in revenue growth.
This means the market is currently valuing Sirtex at 11 times underlying 2009 EPS. In other word, Sirtex as a growth stock has been valued as a value stock.

4.Room for improvement in margin.

Gross margin for 20091H is 76.1%. The average exchange rate for AUD/USD for 20091H is around 0.78. The average exchange rate for AUD/USD since 1st Jan 09 is around 0.66.
I expect gross margin to be back up at 80% or more in 20092H.

The only negative sign is that despite all these position signs, the market has not really responed in a rational way. Too much fear in the market......