Tuesday, August 7, 2007

Natus Medical Inc.

Natus Medical Inc. is a NASDAQ listed security that has been trading in a range between $11.06 and $18.99 over the past year. With 21,573,850 shares outstanding, a recent price of $14.69 gives a total market capitalization of $306,348,666. While there are certainly larger companies, Natus Medical Inc. has definitely earned its place in the pack. Last year, Natus Medical Inc. created $0.25 in earnings for every share outstanding.

Natus Medical Inc. is currently priced by the market at 59.30 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, Natus Medical Inc. could be an interesting value proposition. Consistent earnings are the key to high valuations and this security is well on its way.