Tuesday, February 1, 2011

Nordion Inc

In October 2010, MDS Inc (TSX-MDS) changed its name and stock symbol to Nordion Inc and TSX-NDN. Also, the NYSE changed the symbol for this company from MDZ to NDZ. I bought stock in the old MDS company in 1996, 1997, and 1998. I sold all my shares in 2006. On this stock, I made a total return per year of 5%. Basically, in 2006 I thought this company had lost its way and was going nowhere. I had invested in it as it was one of very few Health Care sector in Canada and it was considered to be a very good company.

This stock has a financial year ending at October 31 of each year. MDS did have earnings and cash flow in 2007; however, 2007 was also the year that they cancelled their dividends. In 2008, 2009 and 2010 they did not have any earnings. This company is expected to have some earnings in the financial year ending in October 31, 2011. This company started to report in US$ in 2007. However, no matter how you look at the company, in US$ or CDN$, this company has not done well over the past 5 years.

All my growth statistics for the past 5 and 10 years are negative or non-calculable due to negative figures in the financial year ending October 31, 2010. For example, the growth in revenue for the last 5 and 10 years is a negative 16% and a negative 30% per year, respective. Interestingly, the growth in revenues per shares is not as bad as this, at a negative 19% and negative 9% per year, respectively. This is because the number of outstanding shares has been decreasing since 2006. This company has been restructuring itself in 2010 and it is probably about time.

I guess a bright spot is that the Liquidity Ratio and the Asset/Liability Ratio is good. The latest Liquidity Ratio is 1.96 and the Asset/Liability Ratio is 2.56. You want both of these ratios to be at least 1.50 and this company’s ratios are certainly good. The Leverage Ratio (Assets/Book Value) is also good at 1.67. There is, of course, no Return on Equity figures, as this company has had no earnings for the last while.

Tomorrow, I will look at what my spreadsheet says about the current price and what analysts are saying about this stock.

Nordion Inc. is a global life sciences company that provides products and services for the development of drugs and diagnosis and treatment of disease. The company is a provider of pharmaceutical contract research, medical isotopes for molecular imaging, radio therapeutics, and analytical instruments. Its web site is here Nordion. See my spreadsheet at ndn.htm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.

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