Wednesday, August 8, 2007

MEDecision Inc.

MEDecision Inc. is a NASDAQ listed security that has been trading in a range between $3.99 and $10.24 over the past year. With 15,310,150 shares outstanding, a recent price of $4.31 gives a total market capitalization of $64,302,627. While there are certainly larger companies, MEDecision Inc. has definitely earned its place in the pack. Last year, MEDecision Inc. created $-2.00 in earnings for every share outstanding.

MEDecision Inc. is currently priced by the market at 0.00 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, MEDecision Inc. is unlikely to be an interesting value proposition. Consistent earnings are the key to high valuations and this security is not on its way.


Anonymous said...

You have to seriously question the existing management team from MEDecision. They launched a totally unsuccessful IPO, have since dropped the market cap by over 60%, and have no reasonable chance of near-term earning. Time for them to be either bought out (Trizetto? McKesson?) or turn over the management team and get on with rebuilding the company.