Monday, March 12, 2007

Market Swoon = Full Bargain Bin

The recent market swoon has resulted in a few new names on the Magic Formula list, large and small. These two seem the best bargains.


  • Axcan Pharmaceuticals (AXCA) specializes in gastroenterology. Each member of its sales force generates an average of $2.5 million in revenue. It has a $740 million market cap, with an 11% Pre-Tax Earnings Yield and over 100% Pre-Tax ROC. It's currently $16.11 a share, with no dividend. Urso and Canasa lose patent protection this year, but they have other products that can make up the loss, like Pylera, and another drug in trials for gastroesophageal reflux disease.

  • Motorola (MOT) has a market cap of over $44 billion, with a 12% EY. It's currently $18.47