Value Line Sample Feb 2009

Part 3
ISSUE 1
THE ALUE LINE Ratings Pages 100-242
File in the binder in order of
® & issue number, removing
Investment Survey Reports
previous issue bearing
the same number.

www.valueline.com February 27, 2009

PAGE PAGE ESPECIALLY NOTEWORTHY:
AUTO & TRUCK INDUSTRY .............. 101 Public Service Enterprise Group ..... 164
Daimler AG ....................................... 102 ★ SCANA Corp. .................................... 165 This week, we welcome three new com-
Federal Signal Corp. ........................ 103 Southern Co. ..................................... 166 panies to the Medical Supplies Indus-
Ford Motor ........................................ 104 TECO Energy, Inc. ............................ 167 try in our Investment Survey: Natus
General Motors ................................. 105 UIL Holdings Corp. .......................... 168
Honda Motor Co., Ltd. (ADR) .......... 106 Medical Inc., Masimo Corp., and
Navistar International Corp. ........... 107 MEDICAL SUPPLIES Volcano Corp., on pages 216, 211, and
Nissan Motor Co., Ltd. (ADR) ......... 108 INDUSTRY ............................................. 169 231, respectively.
Oshkosh Corp. ................................. 109 ★ Abaxis, Inc. ....................................... 170
PACCAR, Inc. ..................................... 110 Advanced Medical Optics, Inc. ........ 171 Timely Wright Medical shares (page
Tata Motors Ltd. ................................ 111 Affymetrix, Inc. ................................. 172
Toyota Motor Corp. (ADR) ................ 112 Alcon Inc. .......................................... 173
233) stand out as a solid investment,
Wabash National Corp. ..................... 113 Align Technology, Inc. ...................... 174 given that the company’s orthopedic
★ Amer. Medical Systems Hldgs, Inc. . 175 products are in growing demand from
PRECISION INSTRUMENT ★★ AmerisourceBergen Corp ................. 176 a baby-boom generation that insists on
INDUSTRY ............................................. 114 ★ AngioDynamics, Inc. ........................ 177
Agilent Technologies, Inc. ................. 115 ★★ Bard (C.R.), Inc. ................................ 178
prolonging its active lifestyle.
Analogic Corp. ................................... 116 ★★ Baxter International, Inc. ................ 179
★ Axsys Technologies, Inc. ................... 117 Beckman Coulter, Inc. ...................... 180 Top-ranked C.R. Bard stock (page 178)
Bruker Corporation ........................... 118 ★★ Becton, Dickinson & Co ................... 181 is an attractive option during this pe-
Checkpoint Systems .......................... 119 ★ Bio-Rad Labs, ‘A’ ............................... 182 riod of economic misery, thanks to its
Cognex Co. ........................................ 120 Boston Scientific ............................... 183 non-cyclical nature and strong earn-
Coherent, Inc. ................................... 121 Cardinal Health, Inc. ....................... 184
★ Dionex Corp. ..................................... 122 Cepheid ............................................. 185 ings potential.
Eastman Kodak ................................ 123 Charles River Laboratories Int’l ..... 186
FARO Technologies, Inc. .................. 124 CONMED Corp. ................................ 187 Stryker Corp. shares are an appeal-
FEI Company .................................... 125 Cooper Companies, Inc. (The) .......... 188 ing choice for both the near term and
GSI Group, Inc. ................................. 126 Covidien Ltd. .................................... 189 long haul, partly due to strong finances
Hutchinson Technology .................... 127 CryoLife, Inc. .................................... 190
II-VI Inc. ........................................... 128 Cutera Inc. ........................................ 191
which position Stryker well when con-
★ K-Tron International, Inc. ............... 129 ★★ Cyberonics, Inc. ................................ 192 summating acquisitions at deeply dis-
KLA-Tencor Corp. ............................. 130 ★ Dentsply International .................... 193 counted prices. See our report on page
Keithley Instruments, Inc. .............. 131 ★★ Edwards Lifesciences Corp. ............. 194 228.
★ MTS Systems Corp. .......................... 132 ev3 Inc. .............................................. 195
Mettler-Toledo Int’l .......................... 133 ★ Genomic Health ................................ 196 Becton Dickinson stock (page 181)
★ Millipore Corp. .................................. 134 ★★ Haemonetics Corp. ........................... 197
National Instruments Corp. ............ 135 Hill-Rom Holdings, Inc. ................... 198 exhibits potent long-term rebound po-
Newport Corp. .................................. 136 Hologic, Inc. ...................................... 199 tential in comparison with its histori-
★ OSI Systems Inc. .............................. 137 IDEXX Labs ...................................... 200 cal averages. This is an opportunity
Orbotech Ltd. .................................... 138 ★ Illumina, Inc. .................................... 201 that shouldn’t be passed up given the
PerkinElmer, Inc. ............................. 139 ★ Immucor Inc. ..................................... 202
Rofin-Sinar Technologies, Inc. ......... 140 ★ Integra Lifesciences Holdings Corp. 203 equity’s excellent credentials (top-
Thermo Fisher Scientific Inc. .......... 141 Intuitive Surgical Inc. ...................... 204 ranked for both Safety and Timeliness).
Tollgrade Communications .............. 142 ★ Invacare ............................................ 205
Varian, Inc. ....................................... 143 Inverness Medical Innovations, Inc. 206 Tollgrade shares may be of interest to
Veeco Instruments, Inc .................... 144 ★★ Johnson & Johnson .......................... 207 the venturesome, given the likely pros-
Waters Corp. ..................................... 145 Kinetic Concepts Inc. ....................... 208
★ Woodward Governor Company ........ 146 LCA-Vision Inc. ................................ 209
pect of a higher bid by an avid suitor.
Zygo Corp. ......................................... 147 ★ Life Technologies Corp. .................... 210 See our take on its future on page 142.
Masimo Corp. ..................................... 211
ELECTRIC UTILITY (EAST) ★★ McKesson Corp. ................................ 212
INDUSTRY ............................................. 148 Medical Action Industries ................ 213
Allegheny Energy Corp. ................... 149 ★ Medtronic, Inc. .................................. 214
★ CH Energy Group ............................. 150 ★★ Meridian Bioscience, Inc. ................. 215
Central Vermont Public Service ...... 151 Natus Medical Inc. ........................... 216 ★★ Thoratec Corp. .................................. 229
★ Consolidated Edison ......................... 152 ★ NuVasive, Inc. ................................... 217 ★ Varian Medical Systems, Inc. .......... 230
Constellation Energy Group, Inc. .... 153 Omnicell Inc. ..................................... 218 ★ Volcano Corp. .................................... 231
Dominion Resources, Inc. ................ 154 Osteotech, Inc. .................................. 219 West Pharmaceutical Services ........ 232
Duke Energy Corp. ........................... 155 ★ Owens & Minor, Inc. ........................ 220 ★ Wright Medical Group ...................... 233
★ Exelon Corp. ..................................... 156 Palomar Medical Technologies Inc. . 221 Zimmer Holdings, Inc. ..................... 234
★ FPL Group, Inc. ................................ 157 Patterson Companies ....................... 222 ZOLL Medical Corp. ......................... 235
★ FirstEnergy Corp. ............................ 158 ★★ ResMed, Inc. ..................................... 223
★ Northeast Utilities ........................... 159 ★ St. Jude Medical ............................... 224 SUPPLEMENTARY REPORTS .......... 242
★ NSTAR .............................................. 160 ★ Schein (Henry), Inc. ......................... 225
PPL Corp. .......................................... 161 SonoSite, Inc. .................................... 226 ★★ Rank 1 (Highest) for Timeliness.
Pepco Holdings, Inc. ......................... 162 ★ STERIS Corp. ................................... 227 ★ Rank 2 (Above Average).
★ Progress Energy ............................... 163 ★ Stryker Corp. .................................... 228

In three parts: Part 1 is the Summary & Index. Part 2 is Selection & Opinion. This is Part 3, Ratings & Reports. Volume LXIV, No. 27
Published weekly by VALUE LINE PUBLISHING, INC. 220 East 42nd Street, New York, NY 10017-5891

© 2009, Value Line Publishing, Inc. All rights reserved. Factual material is obtained from sources believed to be reliable and is provided without warranties of any kind. THE PUBLISHER
IS NOT RESPONSIBLE FOR ANY ERRORS OR OMISSIONS HEREIN. This publication is strictly for each subscriber’s own, non-commercial, internal use. No part of this publication
may be reproduced, resold, stored or transmitted in any printed, electronic or other form, or used for generating or marketing any printed or electronic publication, service or product.
See back cover for important disclosures.

February 27, 2009 ECONOMIC SERIES 100
Value Line’s estimates of sales and earnings growth for individual com- deflator will advance about 2.0% per year on the average. The corporate
panies are derived by correlating sales, earnings, and dividends to ap- income tax rate will be around 35%. Long-term interest rates on high-
propriate components or subcomponents of the Gross Domestic Product, grade corporate bonds are projected to be about 6.3% in the years 2012-
presented below. A more detailed forecast appears periodically in Selec- 2014. We expect the Federal Reserve to pursue neutral-to-fairly accom-
tion & Opinion. modative policies except in years in which the economy is overheating.
Based on these assumptions, the Gross Domestic Product will average
HYPOTHESIZED ECONOMIC $16,728 billion in the years 2012-2014, a level that is about 17% above
ENVIRONMENT 3 TO 5 YEARS HENCE the estimated 2008 total of $14,281 billion.
The hypothesized 2012-2014 economic environment into which earnings
are forecast is as follows: Unemployment will average 6.5% of the na- Things may turn out differently. But in the absence of knowledge of the
tional labor force. There will be no major war in progress at that time. future, we use the above assumptions, which appear to be most plau-
Industrial production will be expanding about 4.0% per year. Inflation sible. Thus we are able to apply a common economic environment to all
will continue to be modest. Prices as measured by the broad-based GDP stocks for the purpose of measuring relative growth potential.

THESE ARE THE NATIONAL INCOME SERIES TO WHICH VALUE LINE SALES, EARNINGS, AND DIVIDEND ESTIMATES ARE CORRELATED

ANNUAL STATISTICS 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008* 2009* 2010* 2012-14*
Gross Domestic Product ($Bill.) 8747 9268 9817 10128 10470 10961 11686 12422 13178 13808 14281 14097 14569 16728
Real GDP (2000 Chained $Bill.) 9067 9470 9817 9891 10049 10301 10676 10990 11295 11524 11671 11414 11700 12847
Total Consumption ($Bill.) 6126 6439 6739 6910 7099 7295 7561 7792 8029 8253 8276 8196 8442 9163
Nonresidential Fixed Investment ($Bill.) 1038 1133 1232 1180 1072 1082 1144 1226 1318 1383 1408 1215 1300 1794

Industrial Prod. (% Change, Annualized) 5.9 4.4 4.4 -3.4 -0.3 0.6 2.5 3.3 2.2 1.7 -1.7 -3.5 2.5 4.0
Housing Starts (Mill. Units) 1.62 1.65 1.57 1.60 1.71 1.85 1.95 2.07 1.81 1.34 0.90 0.56 0.95 1.80
Total Light Vehicle Sales (Mill. Units) 15.5 16.9 17.4 17.1 16.8 16.6 16.9 17.0 16.5 16.1 13.1 10.5 12.7 16.0
Personal Savings Rate (%) 4.3 2.4 2.4 1.8 2.4 2.1 2.1 0.4 0.7 0.6 1.7 5.6 4.2 3.0
National Unemployment Rate (%) 4.5 4.2 4.0 4.8 5.8 6.0 5.5 5.1 4.6 4.6 5.8 8.4 8.9 6.5

AAA Corp Bond Rate (%) 6.5 7.0 7.6 7.1 6.5 5.7 5.6 5.2 5.6 5.6 5.6 5.5 5.2 6.3
10-Year Treasury Note Rate (%) 5.3 5.6 6.0 5.0 4.6 4.0 4.3 4.3 4.8 4.6 3.7 2.8 3.4 4.8
3-Month Treasury Bill Rate (%) 4.8 4.6 5.8 3.4 1.6 1.0 1.4 3.1 4.7 4.4 1.4 0.4 0.8 4.0

ANNUAL RATES OF CHANGE
Real GDP 4.2 4.4 3.7 0.8 1.6 2.5 3.6 2.9 2.8 2.0 1.3 -2.2 2.5 3.3
GDP Deflator 1.1 1.4 2.2 2.4 1.7 2.1 2.9 3.3 3.2 2.7 2.2 0.6 1.2 2.0
Consumer Price Index 1.5 2.2 3.4 2.8 1.6 2.3 2.7 3.4 3.2 2.9 3.8 -0.7 2.3 3.0

QUARTERLY ANNUALIZED RATES 2008 2009 2010
1st 2nd 3rd 4th* 1st* 2nd* 3rd* 4th* 1st* 2nd* 3rd* 4th*
Gross Domestic Product ($Bill.) 14151 14294 14413 14265 14147 14026 14068 14148 14272 14403 14650 14951
Real GDP (2000 Chained $Bill.) 11646 11727 11712 11599 11451 11364 11393 11449 11514 11586 11785 11915
Total Consumption ($Bill.) 8316 8341 8261 8187 8146 8166 8207 8267 8329 8391 8450 8600
Nonresidential Fixed Investment ($Bill.) 1423 1432 1426 1352 1290 1228 1179 1164 1178 1198 1300 1525

Industrial Production (% Change, Annualized) 0.4 -3.1 -8.9 -11.5 -10.0 -4.0 -1.0 1.0 2.0 3.0 2.8 2.4
Housing Starts (Mill. Units) 1.05 1.02 0.88 0.66 0.50 0.52 0.55 0.65 0.75 0.90 1.00 1.10
Total Light Vehicle Sales (Mill. Units) 15.2 14.1 12.9 10.3 9.5 10.0 11.0 11.5 12.0 12.5 12.8 13.0

*Estimated

Arnold Bernhard, Founder (1901-1987) Jean Bernhard Buttner, Chairman & CEO
Samuel Eisenstadt, Research Chairman Reuben Gregg Brewer, Research Director Harvey S. Katz, Managing Editor

Theresa Brophy, Assoc. Research Director Morton L. Siegel, Assoc. Research Director David M. Reimer, Asst. Research Director
Charles Clark, Assoc. Research Director Jeremy J. Butler, Asst. Research Director
Robert Mitkowski, Jr., Assoc. Research Director Mario Ferro, Asst. Research Director Harold Levine, Director, Statistical Services
George A. Niemond, Assoc. Research Director Alan G. House, Asst. Research Director

Senior Industry Analyst-Specialists: Matthew E. Spencer Information Technology: Statistics:
Analysts: Damon Churchwell Garrett Sussman Shawn Cohen, Chief Information Officer Brandon Cheatham, Stat. Research Asst.
David R. Cohen Andre J. Costanza Mary Beth Wiedenkeller Tamika Messam, Quantitative Analyst
Paul E. Debbas Iason Dalavagas Irina Zaydvarg, Statistics Clerk
William G. Ferguson Erik M. Manning Computer Services:
Ian Gendler Douglas G. Maurer Junior Analysts: Hassan Davis, Director, Applications & Develop.
Robert M. Greene Lester Ratcliff John D. Burke Donna Webb, Production Control Manager Data Administration:
Frederick L. Harris, III Adam Rosner Michael Ratty Ayako Tokunaga, Senior Programmer/Analyst Mila Grayevsky, Senior Database Analyst
Justin Hellman Simon R. Shoucair Michael J. Shea James Hammargren, Senior Programmer/Analyst Curtis R. Clarke, Manager, Equity Data Div.
Kenneth A. Nugent Michael G. Swietnicki Terry Yu, Senior Software Development/Support Edith Barnor, Database Analyst
George I. H. Rho Christopher T. Wells Larry David, Supervisor, Computer Operations Dana Jones, Database Analyst
Sigourney B. Romaine George Moy, Dir., Internet Infrastructure/Ntwrks Patrick G. O’Connor, Supervisor, Quality Ctrl.
Randy Shrikishun Analysts: Shannon Egerton, Tech Support Frantz Goodridge, Research Assistant
Craig Sirois Sharif Abdou Desmond Eng, Tech Support Clive Russell, Research Assistant
Warren Thorpe Kevin Downing Bill Mandra, Software Development Manager
Bryan J. Fong
Richard Gallagher Production:
Senior Analysts: Jerry W. Gray Jr. LeShane W. Lilly, Production Manager
Erik A. Antonson William Kuo Michael Manchess, Production Coordinator
J. Susan Ferrara Nira Maharaj Warren Tabachnick, Production Editor
Jerome H. Kaplan Michael F. Napoli
Tom Nikic Joel Schwed
Jason A. Smith Orly Seidman
Nils C. Van Liew Dominic B. Silva

© 2009, Value Line Publishing, Inc. All rights reserved. Factual material is obtained from sources believed to be reliable and is provided without warranties of any kind.
THE PUBLISHER IS NOT RESPONSIBLE FOR ANY ERRORS OR OMISSIONS HEREIN. This publication is strictly for subscriber's own, non-commercial, internal use. No part of it To subscribe call 1-800-833-0046.
may be reproduced, resold, stored or transmitted in any printed, electronic or other form, or used for generating or marketing any printed or electronic publication, service or product.

ABAXIS, INC. NDQ-ABAX RECENT
PRICE 17.25 P/E 27.0(Trailing: NMF) RELATIVE 2.31 DIV’D
RATIO Median:
30.3
P/E RATIO YLD Nil VALUE
LINE 170
TIMELINESS 2 Raised 2/13/09 High:
Low:
3.8
1.1
8.3
1.4
11.0
4.1
6.3
2.3
7.0
2.5
21.9
3.2
23.8
10.9
18.9
7.5
26.8
16.2
40.0
16.9
38.1
10.2
19.5
13.2
Target Price Range
2012 2013 2014
SAFETY 3 New 2/29/08 LEGENDS
22.0 x ″Cash Flow″ p sh
TECHNICAL 2 Raised 2/6/09 . . . . Relative Price Strength
Options: Yes
80
BETA 1.30 (1.00 = Market) Shaded area: prior recession 60
Latest recession began 12/07 50
2012-14 PROJECTIONS 40
Ann’l Total
Price Gain Return 30
High 40 (+130%) 24% 25
Low 25 (+45%) 10% 20
Insider Decisions 15
A M J J A S O N D
to Buy 0 0 0 0 0 0 0 0 0 10
Options 0 2 0 0 1 0 2 1 1
to Sell 0 2 0 0 1 0 0 0 0 7.5
% TOT. RETURN 1/09
Institutional Decisions THIS VL ARITH.
1Q2008 2Q2008 3Q2008 STOCK INDEX
Percent 45 1 yr. -51.4 -39.3
to Buy 90 71 57 shares 30
to Sell 50 56 56 3 yr. -20.6 -36.6
traded 15
Hld’s(000) 20686 21957 21008 5 yr. -16.7 -18.3
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 © VALUE LINE PUB., INC. 12-14
.19 .17 .30 .61 1.00 1.03 1.48 1.83 1.87 2.07 2.40 2.65 3.42 4.07 4.63 4.95 5.85 6.45 Sales per sh A 9.35
d1.33 d1.36 d.56 d.45 d.30 d.28 .00 .08 .18 .17 1.32 .34 .48 .60 .74 .75 .95 1.05 ‘‘Cash Flow’’ per sh 1.50
d1.43 d1.24 d.65 d.59 d.44 d.31 d.05 d.09 .02 .02 1.16 .22 .35 .46 .56 .59 .75 .85 Earnings per sh B 1.25
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- Nil Nil Nil Div’ds Decl’d per sh Nil
.27 .19 .06 .08 .05 .07 .13 .37 .05 .07 .07 .13 .16 .14 .17 .20 .20 .25 Cap’l Spending per sh .30
1.60 1.67 1.09 .79 .39 .30 .46 .76 .84 1.00 2.80 3.10 3.53 4.14 4.82 5.70 6.30 7.35 Book Value per sh 10.85
6.26 6.26 9.86 11.89 12.19 12.96 15.70 16.10 16.34 16.82 19.52 19.89 20.14 21.21 21.71 22.00 22.25 22.50 Common Shs Outst’g C 23.00
-- -- -- -- -- -- -- -- NMF NMF 11.0 NMF 41.8 46.5 46.4 Bold figures are Avg Ann’l P/E Ratio 25.0
-- -- -- -- -- -- -- -- NMF NMF .63 NMF 2.23 2.51 2.46 Value Line Relative P/E Ratio 1.65
estimates
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- Avg Ann’l Div’d Yield Nil
CAPITAL STRUCTURE as of 12/31/08 23.2 29.5 30.6 34.8 46.9 52.8 68.9 86.2 100.6 109 130 145 Sales ($mill) A 215
.2% 4.9% 10.5% 9.2% 13.7% 17.0% 18.7% 19.8% 21.1% 21.5% 22.5% 23.0% Operating Margin 24.0%
Total Debt None .7 1.3 1.7 1.6 1.7 1.9 2.1 2.7 3.5 4.0 4.5 4.5 Depreciation ($mill) 6.0
Leases, Uncapitalized Annual rentals $4.4 mill. d.6 .2 1.3 1.6 24.0 4.9 7.5 10.1 12.5 13.0 16.5 19.0 Net Profit ($mill) 28.0
-- 10.0% 1.2% .3% -- 34.1% 35.1% 37.6% 36.9% 36.0% 36.0% 36.0% Income Tax Rate 36.0%
No Defined Benfit Pension Plan NMF .6% 4.3% 4.7% 51.3% 9.2% 10.8% 11.7% 12.4% 11.9% 12.7% 13.1% Net Profit Margin 13.0%
4.0 7.2 13.3 17.9 25.9 38.8 49.7 74.6 52.5 110 135 160 Working Cap’l ($mill) 275
Preferred Stock None .9 1.5 1.0 .5 -- -- -- -- -- Nil Nil Nil Long-Term Debt ($mill) Nil
Common Stock 21,899,000 shares 7.2 15.5 20.7 25.4 54.6 61.7 71.0 87.8 104.6 125 140 165 Shr. Equity ($mill) 250
NMF 1.7% 6.3% 6.6% 44.1% 7.9% 10.5% 11.5% 11.9% 12.0% 12.0% 11.5% Return on Total Cap’l 11.0%
NMF 1.2% 6.3% 6.4% 44.0% 7.9% 10.5% 11.5% 11.9% 12.0% 12.0% 11.5% Return on Shr. Equity 11.0%
MARKET CAP: $375 million (Small Cap) NMF NMF 9.5% 7.0% 44.0% 7.9% 10.5% 11.5% 11.9% 12.0% 12.0% 11.5% Retained to Com Eq 11.0%
CURRENT POSITION 2006 2007 12/31/08 -- -- -- -- -- -- -- -- -- Nil Nil Nil All Div’ds to Net Prof Nil
($MILL.)
Cash Assets 45.2 24.2 74.6 BUSINESS: Abaxis, Inc. develops, manufacturers, and markets market accounts for roughly 70% of total sales. About 85% of sales
Receivables 16.9 20.9 21.6 portable blood analysis systems for use in veterinary or human are domestic. Has 265 employees. Off. & dir. own 6.6% of common
Inventory (FIFO) 14.8 18.7 17.1 patient-care settings to provide clinicians with blood constituent stock; Next Century Growth Investors, 8.1%; Brown Capital Mgmt.,
Other 10.4 2.8 4.7
Current Assets 87.3 66.6 118.0 measurements. The company markets its primary product, a blood 7.4% (9/08 Proxy). Chairman, CEO & President: Clinton H. Sever-
Accts Payable 6.5 6.4 5.9 analysis system, for veterinary use under the VetScan name and in son. Incorporated: CA. Address: 3240 Whipple Road, Union City,
Debt Due -- -- -- the human medical market under the Piccolo name. The veterinary CA 94587. Telephone: (510) 675-6500. Internet: www.abaxis.com.
Other 6.2 7.7 6.9
Current Liab. 12.7 14.1 12.8 Abaxis is facing a difficult market en- the deeper portfolio will help offset some of
vironment. The portable blood analysis the macroeconomic concerns and enable
ANNUAL RATES Past Past Est’d ’05-’07 systems maker came up a bit short of ex- Abaxis to post 10%-15% share-net growth
of change (per sh) 10 Yrs. 5 Yrs. to ’12-’14
Sales 20.5% 16.0% 13.0% pectations in the third quarter (fiscal year in the fourth quarter and a 25%-30%
‘‘Cash Flow’’ - - 33.0% 14.0% ends March 31st) reporting an uninspiring bottom-line advance in fiscal 2009.
Earnings -- - - 16.0% share-earnings advance of a penny over Wall Street seems to agree. In a rela-
Dividends -- -- Nil
Book Value 18.5% 37.0% 15.0% the prior year. Although medical market tively down market, Abaxis shares have
Fiscal Full
sales improved 19%, overall top-line increased over 20% in value since our No-
Year QUARTERLY SALES ($ mill.) A Fiscal growth was muted as demand for vember report and are now favorably
Begins Jun.30 Sep.30 Dec.31 Mar.31 Year
veterinary products fell due to the more ranked for Timeliness. The stock does not
2006 20.4 21.0 22.0 22.8 86.2 discretionary nature of this business. We stand out for 3- to 5-year appreciation
2007 22.9 25.3 25.7 26.7 100.6 suspect that the veterinary franchise will potential, however, as the run-up has dis-
2008 24.6 27.7 27.0 29.7 109 remain under pressure until there is evi- counted a noticeable portion of the share-
2009 28.0 33.5 33.5 35.0 130
2010 31.0 36.5 37.5 40.0 145 dence of an economic turnaround. price gains we envision out to 2012-2014.
Fiscal Full
The benefits of product introductions The company possesses the means to
Year EARNINGS PER SHARE AB Fiscal should help ease the pain a bit, improve its growth prospects, how-
Begins Jun.30 Sep.30 Dec.31 Mar.31 Year
though. Abaxis recently rolled out the ever. Abaxis is debt-free, has a healthy
2006 .10 .10 .13 .13 .46 VetScan VSpro Coagulation Analyzer and cash reserve, and generates good cash
2007 .14 .13 .14 .15 .56 the VetScan Canine Heartworm Rapid flow. We believe that management would
2008 .12 .15 .15 .17 .59
2009 .14 .18 .20 .23 .75 test. We are especially intrigued by the be wise to use the acquisition market to
2010 .16 .20 .23 .26 .85 latter, which is likely to be the first in a expand its medical business, as this opera-
series of rapid, lateral-flow tests. The tion offers far greater growth potential
Cal- QUARTERLY DIVIDENDS PAID Full heartworm market is estimated to be than the veterinary segment, but accounts
endar Mar.31 Jun.30 Sep.30 Dec.31 Year
valued at more than $70 million per year. for only one-quarter of total sales. That
2005 Meanwhile, the company continues to gain said, long-term investors may want to wait
2006 NO CASH DIVIDENDS traction with its medical segment with the until plans are put in place before commit-
2007 BEING PAID FDA, waiving CLIA status for two addi- ting funds.
2008
2009 tional point-of-care test panels. We think Andre J. Costanza February 27, 2009
(A) Fiscal years end March 31st of the follow- (C) In millions. Company’s Financial Strength B+
ing year. Stock’s Price Stability 20
(B) Diluted earnings. Next earnings report due Price Growth Persistence 85
early May. Earnings Predictability 35
THE PUBLISHER IS NOT RESPONSIBLE FOR ANY ERRORS OR OMISSIONS HEREIN. This publication is strictly for subscriber’s own, non-commercial, internal use. No part To subscribe call 1-800-833-0046.
of it may be reproduced, resold, stored or transmitted in any printed, electronic or other form, or used for generating or marketing any printed or electronic publication, service or product.

ADVANCED MEDICAL NYSE-EYE RECENT
PRICE 21.91 P/E 28.1(Trailing: NMF) RELATIVE 2.40 DIV’D
RATIO Median:
37.8
P/E RATIO YLD Nil VALUE
LINE 171
TIMELINESS – Suspended 1/23/09 High:
Low:
12.4
7.7
20.7
11.3
43.7
20.0
44.5
32.0
52.9
33.9
44.0
23.4
24.9
2.9
22.0
6.4
Target Price Range
2012 2013 2014
SAFETY 4 Lowered 11/28/08 LEGENDS
7.0 x ″Cash Flow″ p sh 64
TECHNICAL – Suspended 1/23/09 . . . . Relative Price Strength
Options: Yes 48
BETA 1.15 (1.00 = Market) Shaded area: prior recession 40
Latest recession began 12/07
2012-14 PROJECTIONS 32
Ann’l Total 24
High 30 (+35%) 8%
Low 17 (-20%) -6% 16
A M J J A S O N D
to Buy 0 1 0 0 1 0 0 0 0 8
Options 0 1 0 0 0 0 0 0 0 6
to Sell 0 1 0 0 0 0 0 0 0
% TOT. RETURN 1/09
Percent 60 1 yr. 4.6 -39.3
to Sell 87 89 88 3 yr. -50.7 -36.6
traded 20
Hld’s(000) 75784 72142 67465 5 yr. -4.0 -18.3
-- -- -- -- -- -- -- -- -- 18.74 20.47 20.02 13.57 16.76 17.99 19.20 19.20 20.50 Sales per sh 24.00
-- -- -- -- -- -- -- -- -- 1.45 .88 d.81 d5.92 1.46 .69 2.60 2.75 2.95 ‘‘Cash Flow’’ per sh 3.60
-- -- -- -- -- -- -- -- -- .90 .35 d1.62 d8.28 .12 d.96 .75 .85 1.00 Earnings per sh A 1.55
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- Nil Nil Div’ds Decl’d per sh Nil
-- -- -- -- -- -- -- -- -- .76 .67 .65 .50 .67 .75 .70 .75 .80 Cap’l Spending per sh .95
-- -- -- -- -- -- -- -- -- 2.29 3.17 7.45 14.89 12.03 9.87 10.75 11.65 12.75 Book Value per sh B 17.20
-- -- -- -- -- -- -- -- -- 28.72 29.38 37.07 67.83 59.51 60.64 61.40 61.75 62.00 Common Shs Outst’g C 62.50
-- -- -- -- -- -- -- -- -- 11.3 45.4 -- -- NMF NMF 23.2 Bold figures are Avg Ann’l P/E Ratio 14.5
-- -- -- -- -- -- -- -- -- .62 2.59 -- -- NMF NMF 1.43 Value Line Relative P/E Ratio .95
estimates
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- Avg Ann’l Div’d Yield Nil
CAPITAL STRUCTURE as of 9/30/08 -- -- -- 538.1 601.5 742.1 920.7 997.5 1090.8 1180 1185 1270 Sales ($mill) 1500
-- -- -- 15.5% 12.5% 7.6% NMF 21.8% 11.5% 22.0% 23.0% 23.0% Operating Margin 23.5%
Total Debt $1545.5 mill. Due in 5 Yrs $18.0 mill. -- -- -- 15.7 15.5 23.6 51.6 70.6 99.2 114 116 118 Depreciation ($mill) 125
LT Debt $1541.0 mill. LT Interest $70.0 mill.
(70% of Capital) -- -- -- 25.9 10.4 d53.8 d453.2 16.5 d57.4 46.0 55.0 65.0 Net Profit ($mill) 100
-- -- -- 41.9% 40.0% -- -- 65.6% NMF 38.5% 39.0% 39.5% Income Tax Rate 40.0%
-- -- -- 4.8% 1.7% NMF NMF 1.7% NMF 3.9% 4.7% 5.1% Net Profit Margin 6.7%
Pension Assets-12/07 $10.1 bill. Oblig. $20.7 bill. -- -- -- 166.3 137.2 182.9 218.9 260.6 180.5 210 290 350 Working Cap’l ($mill) 525
-- -- -- 277.6 233.6 550.6 500.0 851.1 1543.2 1450 1400 1325 Long-Term Debt ($mill) 1000
Preferred Stock None -- -- -- 65.7 93.2 276.3 1010.1 716.0 598.7 660 720 790 Shr. Equity ($mill) 1075
Common Stock 61,281,853 shares -- -- -- 9.6% 6.9% NMF NMF 1.9% NMF 3.5% 4.0% 4.5% Return on Total Cap’l 6.5%
-- -- -- 39.4% 11.1% NMF NMF 2.3% NMF 7.0% 7.5% 8.0% Return on Shr. Equity 9.5%
MARKET CAP: $1.3 billion (Mid Cap) -- -- -- 39.4% 11.1% NMF NMF 2.3% NMF 7.0% 7.5% 8.0% Retained to Com Eq 9.5%
CURRENT POSITION 2006 2007 9/30/08 -- -- -- -- -- -- -- -- -- -- Nil Nil All Div’ds to Net Prof Nil
($MILL.)
Cash Assets 34.5 34.5 35.0 BUSINESS: Advanced Medical Optics, Inc. provides a full range of ticians, ophthalmologists, and retailers, as well as clinics and am-
Receivables 232.4 250.0 251.6 advanced refractive technologies and support to help deliver op- bulatory surgical centers worldwide. Has roughly 4,100 employees.
Inventory (FIFO) 127.5 160.3 192.6 timal vision and lifestyle experiences. It operates three business Officers & Directors own 19.2% of common stock; ValueAct Capital
Other 83.7 78.3 65.4
Current Assets 478.1 523.1 544.6 segments; the cataract/implant line, the laser vision correction busi- Mgmt., 14.5% (5/08). Chairman, CEO, & President: James V.
Accts Payable 53.9 88.4 64.2 ness, and the contact lens care component. With products available Mazzo. Address: 1700 E. St. Andrew Place, Santa Ana, CA 92705.
Debt Due -- 64.5 4.5 in more than 60 countries, it serves eye surgeons, optometrists, op- Telephone: (714) 247-8200. Internet: http://www.amo-inc.com.
Other 163.6 189.7 183.2
Current Liab. 217.5 342.6 It looks as though Advanced Medical
251.9 2012-2014, absent the takeover. Indeed,
Optics may be nearing its final days the pipeline recently got news that the
ANNUAL RATES Past Past Est’d ’05-’07 in our Survey. The eye care solutions pro- FDA recently approved Advanced’s Tecnis
Sales -- -3.0% 6.0% vider, agreed to be bought by medical Multifocal Intraocular implantable lens.
‘‘Cash Flow’’ -- -- NMF device maker Abbott Laboratories in Janu- Those who had bought the stock a few
Earnings -- -- NMF ary for roughly $2.8 billion, including the years back may question the sale.
Dividends -- -- Nil
Book Value - - 40.0% 5.0% assumption of more than $1.5 billion in Still, most will probably want to sign
debt. Specifically, EYE shareholders are off on the agreement that is currently
Cal- QUARTERLY SALES ($ mill.) Full slated to receive $22 in cash for each com- on the table. EYE stock has been ex-
endar Mar.31 Jun.30 Sep.30 Dec.31 Year mon share owned. The deal looks to be tremely volatile, making the recovery we
2006 238.2 257.0 258.6 243.7 997.5 moving along smoothly, recently clearing are projecting dubious. Not only are the
2007 251.7 261.3 273.2 304.6 1090.8 U.S. antitrust regulations, but is still prospects of the corrective surgery busi-
2008 303.7 320.5 275.6 280.2 1180 awaiting European and shareholder ap- ness in question, but it is important to
2009 285 310 285 305 1185
2010 305 325 310 330 1270 proval. If all goes well, we expect the deal keep the earlier mishap with the compa-
to close by the end of the first quarter. ny’s solution line in mind. It is likely to be
Cal- EARNINGS PER SHARE A Full The price tag appears to be attractive. a long road back for this business, placing
The purchase price represents a 149% pre- an even more vital need on the corrective
2006 .04 d.04 .33 d.13 .12 mium over EYE’s closing price the day be- surgery franchise. We believe that most
2007 .22 d.80 d.35 d.03 d.96 fore the deal was announced. will want to lock in the gain, removing any
2008 .22 .24 .15 .14 .75
2009 .20 .23 .21 .21 .85 Things are not as clear-cut as they uncertainty that the stock brings with it.
2010 .24 .27 .25 .24 1.00 may initially seem, however. EYE stock The issue is ranked 4 (Below Average) for
had been beaten up in the months leading Safety and has a low Price Stability score.
Cal- QUARTERLY DIVIDENDS PAID Full up to the announcement, as the economic Andre J. Costanza February 27, 2009
malaise raised concerns about future CASH POSITION 5-Year Av’g 9/30/08
2005 demand for corrective eye surgeries. That
2006 NO CASH DIVIDENDS Current Assets to Current Liabilities: 194% 116%
said, the current bid represents a 12% dis- Cash & Equiv’s to Current Liabilities: 21% 14%
2007 BEING PAID count to the stock’s 52-week high price, a
2008 Working Capital to Sales: 23% 25%
2009 target we envision the issue surpassing by
(A) Diluted EPS. Excludes nonrecurring gain/ count. Company’s Financial Strength C++
(losses): ’04, ($2.03); ’06, $1.06; ’07, ($2.26). (B) Includes intangibles. In ’07: $1.938 billion Stock’s Price Stability 5
Next earnings report due early May. Quarterly or $31.97 a share. Price Growth Persistence 45
figures may not add due to changes in share (C) In millions. Earnings Predictability 5

AFFYMETRIX INC. NDQ-AFFX RECENT
PRICE 3.13 P/E NMF(Trailing: NMF) RELATIVE NMF DIV’D
RATIO Median: NMF P/E RATIO YLD Nil VALUE
LINE 172
TIMELINESS 4 Raised 2/13/09 High:
Low:
17.6
8.1
97.6
11.8
163.5
42.3
74.6
14.0
41.9
13.8
29.9
16.3
38.2
23.2
59.7
33.9
48.0
17.5
32.0
20.0
23.8
2.0
4.2
2.9
Target Price Range
2012 2013 2014
SAFETY 4 Lowered 10/24/08 LEGENDS
18.0 x ″Cash Flow″ p sh 64
TECHNICAL 1 Raised 2/27/09 . . . . Relative Price Strength
2-for-1 split 8/00 48
BETA 1.25 (1.00 = Market) Options: Yes 40
Shaded area: prior recession
2012-14 PROJECTIONS Latest recession began 12/07 32
Ann’l Total 24
High 14 (+345%) 45%
Low 9 (+190%) 30% 16
A M J J A S O N D
to Buy 1 0 0 1 0 0 0 0 0 8
Options 0 0 0 0 0 0 0 0 0 6
to Sell 0 0 0 0 0 0 0 0 0
% TOT. RETURN 1/09
Percent 90 1 yr. -84.1 -39.3
to Sell 79 68 92 3 yr. -91.7 -36.6
traded 30
Hld’s(000) 73739 68089 66935 5 yr. -89.8 -18.3
-- -- -- .27 .43 1.13 1.85 3.51 3.88 4.95 5.06 5.62 5.47 5.23 5.36 4.55 4.35 4.60 Revenues per sh 5.55
-- -- -- d.24 d.44 d.45 d.36 d.76 d.32 .35 .86 1.19 1.28 .43 .82 .15 .35 .65 ‘‘Cash Flow’’ per sh 1.25
-- -- -- d.41 d.50 d.56 d.51 d.98 d.61 d.03 .40 .74 .84 d.03 .34 d.47 d.30 Nil Earnings per sh A .55
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- Nil Nil Div’ds Decl’d per sh Nil
-- -- -- .08 .35 .36 .30 .45 .58 .42 .21 .36 .60 1.17 .40 .20 .25 .25 Cap’l Spending per sh .35
-- -- -- 2.50 2.00 1.45 2.51 2.57 2.22 2.31 2.78 4.05 7.73 8.14 8.65 4.30 4.00 4.05 Book Value per sh 5.25
-- -- -- 45.07 45.57 46.03 52.37 57.14 58.01 58.50 59.45 61.59 67.22 67.92 69.22 70.50 71.00 71.75 Common Shs Outst’g B 74.00
-- -- -- -- -- -- -- -- -- -- 57.7 41.7 55.0 -- 75.1 -- Bold figures are Avg Ann’l P/E Ratio 21.0
-- -- -- -- -- -- -- -- -- -- 3.29 2.20 2.93 -- 3.99 -- Value Line Relative P/E Ratio 1.40
estimates
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- Avg Ann’l Div’d Yield Nil
CAPITAL STRUCTURE as of 9/30/08 96.9 200.8 224.9 289.9 300.8 346.0 367.6 355.3 371.3 320.3 310 330 Revenues ($mill) 410
Total Debt $436.3 mill. Due in 5 Yrs Nil NMF NMF NMF 12.7% 18.8% 24.7% 25.6% 7.3% 14.4% 3.5% 7.5% 13.5% Operating Margin 25.0%
LT Debt $436.3 mill. LT Interest $12.0 mill. 6.5 10.7 16.3 22.0 26.7 25.7 28.2 31.1 32.1 43.0 46.0 48.0 Depreciation ($mill) 52.0
Incl. $120 mill. of 3⁄4% 2033 notes, convertible at a
price of $31.01 a share, and $316.3 million of d23.1 d54.0 d34.8 d1.6 24.2 47.6 57.5 d2.1 24.5 d32.2 d21.0 Nil Net Profit ($mill) 40.0
31⁄2% 2038 notes, conv. at $30.12. -- -- -- -- 10.2% 6.5% 8.1% -- 27.0% -- NMF NMF Income Tax Rate 25.0%
(41% of Cap’l) NMF NMF NMF NMF 8.0% 13.8% 15.6% NMF 6.6% NMF NMF NMF Net Profit Margin 9.8%
Leases, Uncapitalized: Annual rentals $10.7 mill. 228.7 418.3 372.7 371.7 192.8 226.3 345.6 290.3 583.1 420.8 425 455 Working Cap’l ($mill) 510
No Defined Pension Plan 155.0 380.1 375.0 377.2 120.0 120.0 120.0 120.0 436.3 316.3 315 315 Long-Term Debt ($mill) 315
Pfd Stock None
131.3 147.1 129.0 134.9 165.1 249.2 519.8 553.0 598.4 303.7 285 290 Shr. Equity ($mill) 390
Common Stock 70,202,630 shs. NMF NMF NMF 1.6% 11.5% 14.4% 9.1% NMF 2.5% NMF NMF NMF Return on Total Cap’l 5.5%
as of 10/31/08 NMF NMF NMF NMF 14.7% 19.1% 11.1% NMF 4.1% NMF NMF NMF Return on Shr. Equity 10.5%
MARKET CAP: $225 million (Small Cap) NMF NMF NMF NMF 14.7% 19.1% 11.1% NMF 4.1% NMF NMF NMF Retained to Com Eq 10.5%
CURRENT POSITION 2006 2007 9/30/08 NMF -- -- -- -- -- -- -- -- -- Nil Nil All Div’ds to Net Prof Nil
($MILL.)
Cash Assets 237.2 494.4 579.4 BUSINESS: Affymetrix Inc. is a leading genomics company that tech. companies, as well as academic research centers and clinical
Receivables 77.8 81.6 63.5 manufactures tools that enable the large-scale analysis of the hu- reference labs. ’07 R&D; $72.7 mill. Has 1,140 employees. Off./dir.
Inventory (Avg Cst) 46.5 42.9 46.4 man genome. The company’s GeneChip technology is intended to own 2.5% of com; FMR Corp., 14.6%; T. Rowe Price, 10.4%;
Other 22.4 48.2 23.5
Current Assets 383.9 667.1 712.8 simplify, accelerate, and reduce the cost of analyzing genetic PrimeCap Mgmt., 8.2% (4/08 Proxy). Chairman & CEO: Stephen P.
Accts Payable 62.9 61.5 15.0 variability (both sequence and expression) and lead to new op- Fodor, Ph.D. Pres.: Kevin M. King. Inc.: Del. Addr.: 3380 Central
Debt Due -- -- -- portunities in disease mgmt. Products are used by pharm. and bio- Expressway, Santa Clara, CA 95051. Tel.: 408-731-5000.
Other 30.7 22.5 57.6
Current Liab. 93.6 84.0 72.6 The recently concluded year was margins that exceed 60% to merely break
clearly a very difficult one for Af- even. We don’t expect either threshold to
ANNUAL RATES Past Past Est’d ’05-’07 fymetrix, as reflected by the untimely be achieved in 2009, until possibly the last
Revenues 31.5% 5.5% .5% stock’s price chart above. Market-share quarter. Indeed, management’s revenue
‘‘Cash Flow’’ -- -- 6.0% losses hurt revenues, and this problem guidance for the March quarter is only
Earnings -- -- 5.5% was exacerbated by a progressively deeper $72–$75 million; it declined to provide
Dividends -- -- Nil
Book Value 14.0% 28.0% -6.0% retrenchment by pharma and academic guidance for the full year, which we think
end users. In all, year-over-year top-line is prudent, considering the extraordinarily
Cal- QUARTERLY REVENUES ($ mill.) Full comparisons deteriorated dramatically in low visibility across the board. We are
endar Mar.31 Jun. 30 Sep. 30 Dec. 31 Year 2008’s second half, tumbling 20.8% and leaving our estimate for the year at a loss
2006 86.4 80.1 84.6 104.2 355.3 27.0% in the third and fourth quarters, of $0.30 per share.
2007 80.4 88.3 95.0 107.6 371.3 respectively; the decline was a relatively A reasonably healthy balance sheet
2008 79.6 86.9 75.2 78.6 320.3 modest 1.3% in the initial six months. Not suggests that the company has stay-
2009 75.0 77.0 78.0 80.0 310
2010 80.0 82.0 83.0 85.0 330 surprisingly, the operating margin also ing power . . . Affymetrix paid down debt
collapsed, dragging the per-share loss for by $120 million in 2008. It also executed
Cal- EARNINGS PER SHAREA Full the full year to $0.47, well below the $0.34 three small acquisitions, which provide the
endar Mar.31 Jun. 30 Sep. 30 Dec. 31 Year
earned in the previous year. That said, we opportunity to both generate sales syner-
2006 .03 d.15 d.06 .15 d.03 would note that the company reported a gies and penetrate new markets. Still,
2007 d.01 .05 .10 .20 .34 full-year loss of $4.49 a share, which in- cash totaled almost $400 million at the
2008 d.02 d.04 d.18 d.23 d.47
2009 d.15 d.10 d.03 d.02 d.30 cludes substantial one-time charges for end of the year. This should give manage-
2010 d.05 d.02 .02 .05 Nil goodwill impairment and restructuring. ment the time to improve its product offer-
The genomics concern’s bottom line ings; it recently launched the GeneTitan
Cal- QUARTERLY DIVIDENDS PAID Full will probably stay in negative terri- System, an integrated platform that auto-
tory this year. The business trends evi- mates customer workflow from target
2005 dent in 2008 were clearly not encouraging, preparation to array processing to results.
2006 NO CASH DIVIDENDS and neither is the prevailing economic en- . . . and AFFX stock offers patient in-
2007 BEING PAID vironment. Affymetrix needs quarterly vestors wide price recovery potential.
2008
2009 revenues of at least $80 million and gross George Rho February 27, 2009
(A) Fully diluted earnings. Excludes nonrecur- (B) In millions, adjusted for a stock split. Company’s Financial Strength B
ring losses: ’03, $0.17; 05, 24¢; ’06, 17¢; ’07, Stock’s Price Stability 20
17¢; ’08, $4.02. Next earnings report due late Price Growth Persistence 10
April. Earnings Predictability 20

Value Line Sample Feb 2009

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