There has been good news for CST in the past few weeks. The reformed CDC guidelines have allowed QFT GIT to be used IN PLACE of and not in ADDITION to TST.
But TST has not been knocked out of the ring.
The expense of QFT is again raised,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,http://www.marketwatch.com/story/los-alamos-national-security-llc-and-biomagnetics-diagnostics-to-collaborate-on-development-of-revolutionary-tb-diagnostic-tool-2010-07-08?reflink=MW_news_stmp

and REVERSIONS in HCWS

Hi Michael,

The press release you give a link to is from a company that is trying to talk up a product that it is yet to develop, receive any kind of approval for or have any credible evidence of its efficacy. I have also been assured that it is, if it ever reaches market, suitable for active TB only which, as I'm sure you know, means that it is not a competitor for QFT. It is a common tactic for start up companies to stretch the truth in a bid to attract backers and/or credibility, this company is, as far I can tell, just another 'maybe, but probably not..."

As for their reference to the expense of IGRAs, there are two approved IGRAs and they are not equal. QFT is considerably cheaper, easier to run and more accurate. There have been several studies that show when all costs associated with TST are included such as staff costs, two patient visits and the number of incorrect results (false positives) that require retesting or treatment then QFT is up to one quarter of the cost, there was a study a few years ago that showed a TST with associated costs can cost well over US$400 even the elispot test is cheaper than that!

CST management have said for a number of years that TST is its biggest competitor and dislodging the incumbent test has proven to be more difficult than anyone imagined but market penetration is now well advanced with no competitors to QFT in sight, I'm as confident as ever that Cellestis will be a highly successful and profitable company ( I suppose it all ready is ). There will be new QFT tests, ever increasing sales and record profits over the coming years so forget Biomagnetics.

Martin

Hi Martin
Thanks. I am greatly impressed by your reading and understanding on this matter.I Expect a report around Aug 25.

Hi MI,
Judging by the recent selling of the stock maybe the report is already out (selected viewing)I never thought this half would be that special but guess what we always have next year to look forward too.

$2.70 for CST at this juncture is fair value post CDC recs in my opinion.

Cheers Comrades Charge!.

Not sure if everyone has seen this or not. Dr. Radford last month:
http://www.cnbc.com/id/37979037/Radford ... _TB_Threat

Regards,
Reify99

Hi reify,

I've often made the mistake of assuming that all shareholders track their investment in CST as avidly as I do but of course the truth is that many look to sites such as this one for information; which is a long winded way of saying feel free to post anything you find as there is always someone that won't have seen it.

Hi charge,

There is a good reason to suppose that CST could be valued today at anything from $1 to $9 dependant on which numbers we care to throw up in the air. You choose not to enlighten us with the logic of 'fair value' being $2.70 but, because I'm a generous sort of bloke with no pressing delicate distractions, I'll give my reasoning as to why there is a case to argue for both $1 and $9 and a few values in between.

$1.....with likely earnings of around 10cps apply a P/E of 10 the product is $1. Simple

$1.50....I recall that the market average, for all sectors is a P/E of around 15 therefore 10cps x 15 = $1.50. Average but mediocre in its reasoning.

However if one were to engage upon a path that is both more insightful and creative one would, if one could be bothered, consider future earnings growth and what range of price to earning ratios other similar companies trade at. For instance, over a long period (10 years) both Coclear (COH) and Resmed (RMD) have traded at an average P/E of around 35 ranging from low 20's to over 60 during that period and both these companies are relatively mature. I would reason that it is a fair assumption that CST will trade in a similar range for some time, for the sake of this calculation lets trim off the excess and say a range of between 25 and 45.

It is perhaps easier to estimate future P/E's than future earnings per share but lets say at the pessimistic end the dollar climbs to parity with the US$ and next years profit is only 12cps, there will be times when buyers are pessimistic and the share price is $3 (.12cps x P/E 25) and more optimistic times with new test announcements, dividend increases etc and the the share price will be over $5 (.12 x 45).

But perhaps the dollar will fall in value and profit gets a boost and we see $20m profit or 20cps then the share price could range from $5 (.20 x 25) to $9 (.2 x 45).

What do I think? Over the coming year profit will be between the above estimates and CST shares will trade somewhere between ~$3 and ~ $5 but is that fair value I hear you say. FIIK share prices are a mystery to me.

Martin

Hi Martin,
I always find it amusing just how much time is devoted to PE on these forums.Usually is due to posters trying to show how smart they are. Forrestgimp is a fine example of such claptrap.

Just to let you know PEs are passe.

To make money in the share market you need to get your hands dirty not punch calculator buttons all day.

c.c.c

Hi charge,

If you are going to declare that fair value is 'x' amount its only reasonable for us that are old fashioned and still labouring with methods that are passe to ask what bright and shiny method you used to arrive at such a conclusion, I'm assuming that you didn't just pluck it from thin air.

I'd like to think that we are not wasting our time here and someone would find it useful to know what may (or may not) happen to the share price over the course of a year and within what parameters it is most likely to occur. Needless to say there are no guarantees. If you know of a better way to take a stab at what may happen in the future than considering what has gone before I would be interested to know.

Turning clods is a great way to get your hands dirty but I'll stick with my calculator.

Over the years you've taught me everything I know about sarcasm, how am I doing?

Martin

Over the years you've taught me everything I know about sarcasm, how am I doing?

Hi Martin, Charge

Martin it looked like you were on UNFAMILIAR territory. But as Jack Gibson would say................"you done good"

Have you made your entry into the guessing comp Charge? it would be a wasted opportunity if you weren't part of 'the team'

Hi Gav,
Iam waiting for the ERG guessing comp, ahh thats right they went into receivership I plum forgot.(LOL)

Cheers Comrades Charge!

This came via rog

Nice write up for CST. There are a few other companies covered, you can read the whole article at the link below.

"D’Amato says you often see stocks putting in good results year after year, growing their earnings, but it takes a while for the market to pick up on it. “That’s where you can find the opportunity to look for the consistent performers, and eventually the market will repay the faith. When is the big question – but if the company keeps performing it will do well.”

At the moment, a couple of stocks that D’Amato thinks are in this position are PanAust (PNA), a copper producer in Laos, and Cellestis (CST), which makes a tuberculosis diagnostic and treatment. “PanAust is a good business, and Cellestis is a stock that has been producing good results year after year, but the share price is 25 per cent lower than a year ago...the market will repay faith in those sorts of businesses.”

He says Cellestis has earnings per share treble what it was in December 2007, yet the share price is only up by about 50 per cent in comparison. “There’s a lot to like about stocks like that, where the earnings growth is quite attractive, but the price, although it’s rising, is not keeping pace with the earnings. When the market finally cottons on to the growth story of what some of these companies are about, they can be rewarded with a sharp run in the share price,” says D’Amato."

http://www.thebull.com.au/articles/a/13 ... tocks.html

Martin