MPH 10.0% 18.0¢ mediland pharm limited

re price movement

  1. 365 Posts.
    It seems a lot of people on Hot copper are of the opinion that MPH is undervalued based on its full year results and the growing demand in DVD sales.

    I actually think it is fully priced.

    In seeing the result and looking at the lack of price movement on continual announcments relating to its future potential I think the market agrees.

    in looking at MPH as a result of a BRW article many months ago it appears there key asset is a substantial library of old movies .

    MPH own the rights to sell the videos and dvd on these movies through the video shops ,on line and through the chain stores.

    Not dissimilar to when records went from vinyl to tapes and from tapes to cds the initial sales of the old "greats "surged.

    Like wise all those households that had the old movies on video and these days this is a small market we have seen MPH benefit as the BUFFS have switched to DVD.

    As the sales are one offs and in my opinion are balloon based the PE of 10 on 2004 earnings and 24 on current seems high.

    It seems interesting that not one announcement has given any confirmation in referrence to the video sales growth on the actual asset which is the library.

    This means once the changover has completed the sales will more than likely retreat to more seasonal levels on the existing library.

    On a positive side the new sales areas such as childrens movies and the new releases with Becker does give it future growth ,opposed to actually what I feel is sales depreciation in its core business.

    The option has just 32 c to pay in feb 2004 and at 10c has zero premium despite my negativity to the the pe feeling its earnings growth is not sustainable I do admit the options seem fairer value.

    I do bnot own MPH or ob and are not a stockbroker so form your own view ,this is just my mere view on a stock that a lot of people seem to think is going up that I dont!!!1

 
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