Roger Montgomery has given CGS a big write up: http://rogermontgomery.com/new-investment-opportunities/
"CogState is capitalised at $34.7 million, has no debt, and cash reserves and short term investments of $3.1 million in the September quarter. The enterprise value, therefore, is $31.6 million. Based on trailing sales of $12.6 million, the enterprise value to sales ratio is 2.5 times ($31.6 million/$12.6 million).
To put that in perspective, Resmed and Cochlear usually trade on an EV/sales multiple of 4-5 times; less-established biotechs in the loss-making phase often trade around 3 times sales, and low-growth biotechs can have an EV/ sales of 0.5 to 1 times. High-growth biotechs trading on an EV / sales multiple closer to 2 times sales are often viewed as undervalued, on this simplistic metric.
CogState has plenty of upside potential and arguably less risk than many emerging biotechs, given it has a developed product, established revenue base, and is on the cusp of faster commercialisation of its newer products. "
CGS Price at posting:
44.7¢ Sentiment: Buy Disclosure: Held
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