Speaking of big whacks, Buckingham Portfolio member LCA-Vision (LCAV - $5.00) provided information that seemed to blur investor 'in-sight' into the company’s near-term future, resulting in heavy selling as shares of the laser vision correction center operator fell more than 24% today. After yesterday's close, LCAV announced that CFO Alan Buckey had resigned and that Michael Celebrezze would take his place on an interim basis. No color was provided for the unexpected departure, though the news that followed likely played a major role.
LCA offered a dismal business update this morning. CEO Steven Straus said that management believed macro-economic conditions and coverage leading up to and following the April 25, 2008 Food and Drug Administration Ophthalmic Devices Panel negatively impacted the firm’s business in May and June. The bottom, or actually the top, line; procedure volume for Q2 is expected to be down 40% on a year-over-year basis.
While some investors will be discouraged by what seems to be an abundance of negative news, we still 'look' positively at LCAV shares; taking note of the company’s solid balance sheet, with little debt, its continued efforts to strengthen its long-term market presence, the tremendous growth potential of the laser-eye surgery biz and management’s announcement of increased measures to control expenses. We would now be buyers of LCAV up to $8.10 as we have revised both our LG/FG downward to $16.
For tonight’s Hotline Special we head north of the boarder to Mississauga, Ontario, home of specialty pharmaceutical company Biovail (BVF - $10.68). That name causes some to recoil in fear as the years of 'questionable' management by ex-CEO Eugene Melnyk put the company in gallons of hot water. But after a change in leadership and a modification of corporate strategy, the company is out of the emergency room, in a more stable condition and value priced for investors willing to be patient for a fuller recovery.
Under Mr. Melnyk, the co