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Gluing it up
by Brian Hicks
Recently my wife called me at the office in hysterics. She had found a tick in my son's head, and she couldn't get the little bugger out. But before I could get out a word, she told me to meet her at the emergency room in 15 minutes.
It took the doctor literally one second to extract the tick. That little trip cost $100.
But the emergency room visit wasn't a complete wash. While I was there, I witnessed Closure Medical's Dermabond in action. A small child had a nasty cut on his hand. No stitches were used to close the wound. Just the glue.
The kid was happy... mom was happy... and as an investor in Closure Medical, I remain bullish on Closure Medical (CLSR -- NASDAQ).
The company recently announced its 1Q99 numbers. Gross revenues came in at US$3.8 million, up 193% from 1Q98's US$770,000.
The net loss for the quarter was US$565,000 (US$0.04 per share), compared to a net loss of US$2 million (US$0.15) for the same quarter next year.
The increasing fundamentals have increased CLSR Medical's FY2000 eps estimate to US$0.91.
The stock has been in a rather tight trading range ever since the explosive rally in early January. However, fundamentals drives technicals. And as Dermabond penetrates more of the market, CLSR's market cap will trade in excess of US$500 million.
The macros on Micros Systems
Micros Systems (MCRS -- NASDAQ) is still one of my favorite growth stocks. The company recently announced its 3Q99 results. Revenues for the quarter came in at US$85 million, up nearly 20% from US$71 million a year ago.
 Net income rose dramatically: US$7.7 million, an increase of over 31% from the same quarter a year ago.
With trailing twelve-month revenues of US$315.6 million, Micros trades at a paltry market cap of just US$531 million. That's a price-to-revenue ratio of 1.68.
It's even more absurd when you compare MCRS's 5-year sales growth average to the S&P 500, 38.3% vs. 17%. Yet the S&P 500 trades at a hefty 5.3X sales.
Even the p/e multiples are out of whack. Micros trades at a trailing p/e multiple of 25 compared to the industry's multiple of 60 and the S&P 500's multiple of 37.
At the current eps estimate for FY99 at US$1.59, Micros is incredibly cheap at a forward p/e ratio of just 20.75. The year 2000 eps estimate is US$2.02 -- giving the stock a stealthy 2-year forward p/e ratio of 16.
Assuming Micros will maintain a p/e ratio of 25 on the year 2000 eps estimate, MCRS is valued at US$50.50, up 53% from current levels.
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