Saturday, June 03, 2006

WEEKEND FEATURE


"NO ACTION IS A DECISION"

Is it time to pick up some CHTT yet? CHTT will grow its revenues by 20%, and EPS by 16% this year, and probably in 07 as well. It had a great Q1/06 and visibility for Q2 and the balance of the year is strong. The company has a decent balance sheet with a manageable level of debt. It is healthcare/consumer sector, and probably can handle both a soft- or a hard-landing. Valuation has become compelling as it has declined significant from its high of $47 to current $35, resulting in a forward P/E of 13 times, for a company growing its earnings by at least 15% for the next couple of years. It continues to reproaches its shares and dido the insiders, both of which purchased at $36-$37 level. There is a rather large short interest out there and could lead the share much higher with some catalyst, or assistance from the macro factors. Definitely on the buying list.

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