Thursday, November 15, 2012

Nyer Medical Group Inc. (NYER) Below Net Current Assets NCAV

I found this company when I was looking in the Pharmacy industry awhile back. It was up 12% today on about triple usual volume. Nothing particular jumped out when I found them weeks ago looking at some basic figures except that it was reasonably priced and I was looking for a small-capper rather than a giant like CVS,WAG,RAD,WMT.

NYER has been paying long-term debt down all of 06' and 07.' EBITDA 8 times enterprise value, insiders have 30% stake. On that note about insider ownership, many acclaimed and smart investors take it into account. But who cares? Many investors pay close attention to insider ownership along with their buying and selling and try to size up the company as a worse or better investment because of it. First, on the buying and selling, it is trivial unless one knows for a fact what reason management sold or bought. Maybe they sold to pay their kids tuition. Would that effect the decision to buy the company? Maybe management is blinded by their own vision of the company even if it has no chance of success and they pick up a huge block of shares.

Isn't it a messed up society if we assume that only the managers with large stakes in the companies they manage will look out for shareholders? How about integrity, work ethic and honesty? Where has it gone? I still believe there are great management even if they don't have a large ownership or any at all for that matter.

Disclosure: no position in NYER

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