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The Money Man Behind Rick Santorum: Who Is Foster S. Friess?eResearchTechnology (NASDAQ: ERES) provides
technology and services to the pharmaceutical, biotechnology and medical device industries. The company streamlines the clinical trials process by enabling customers to automate the collection, analysis and distribution of data in all phases of clinical development. The firm's flagship product, EXPeRT, processes and interprets electrocardiogram data collected during trials, to insure cardiac safety. eResearchTechnology operates in the US and the UK.
The firm pleased investors earlier in the week, when it reported Q1 EPS of 11 cents and revenues of $33.7 million. Wall Street analysts had been looking for nine cents and $31.6 million. Management also guided Q2 EPS to 10-12 cents (ten cent Street), Q2 revenues to $34-$36 million ($32.95M Street), FY08 EPS to 44-49 cents (44 cent Street) and FY08 revenues to $133-$140 million ($134.99M Street). Friedman Billings subsequently reiterated its "outperform" rating on the shares and boosted its price target to $18.
The stock
popped above 30-day moving average support on the news and has since been defining a bullish "flag" consolidation pattern. Stocks frequently exit flags moving in the same direction they were traveling on entry. In this case, that would be to the upside.
Brokers recommend the issue with two "strong buys" and one "hold". Analysts see a 29% growth rate, through the next year. The ERES Price to Free Cash Flow ratio (27.51), Sales Growth rate (59.87%), EPS Growth rate (120.00%), Operating Margin (24.84%), Net Profit Margin (16.85%), Return on Assets (14.03%) and Return on Investment (16.98%) compare favorably with industry, sector and S&P 500 averages. Institutions hold about 86% of the outstanding shares. Over the past 52 weeks, the stock has traded between $8.44 and $15.74. A stop-loss of $12.90 looks good here.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold a position in the stock discussed above.
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