Thursday, June 08, 2006

Interesting Call of The Day - Natus Medical (BABY)

Soleil-Belmont Harbor Capital's Daniel Owczarski is out defending Natus Medical (BABY) today saying that as the stock price of BABY continues to weaken, they believe that there is a widening disconnect between the valuation of the company and that of its peers. What once was a growth story is now becoming more of a value story even though the company's growth prospects seem to be not only intact, but stronger than ever.

They continue to be impressed by the company's ability to meet or beat expectations and are optimistic about growth prospects as it diversifies it businesses with significant opportunities in the pediatrics and international markets. Firm remains confident in this management team and views the CEO Jim Hawkins as extremely capableand credible as he continues to build on his track record of building successful, profitable medical technology franchises. Owczarski strongly reiterates Buy rating.

Comparative valuation analysis that suggests that the stock should be trading at a minimum in the $15 to $18 range and a conservative argument can be made to support a stock price of $20 to $22.

Notablecalls: This BABY sure has taken a brutal beating and while Soleil may not have the following the produce an immediate bounce, the situation looks interesting. Note that a well regarded value manager David Nierenberg holds a huge of the shares and has been a buyer around the $11-$12 levels.

No comments: