Monday, August 6, 2007

Exactech Inc.

Exactech Inc. is a NASDAQ listed security that has been trading in a range between $12.10 and $16.85 over the past year. With 11,558,990 shares outstanding, a recent price of $15.89 gives a total market capitalization of $185,175,025. While there are certainly larger companies, Exactech Inc. has definitely earned its place in the pack. Last year, Exactech Inc. created $0.69 in earnings for every share outstanding.

Exactech Inc. is currently priced by the market at 23.00 times last year’s earnings. Many trading multiples around the world are quite attractive these days, but don’t be fooled. A Price to Earnings ratio of 0 simply means that the security didn’t make any money last year.

With a share price under $50 a share and earnings per share below $1 a share, Exactech Inc. could be an interesting value proposition. Consistent earnings are the key to high valuations and this security is well on its way.