IMMUCOR INC. - EVALUATION

A. MANAGEMENTS EFFECTIVENESS - GOOD
B. PRODUCTS & SERVICES - GOOD
C. SALES - GOOD
D. (OPERATIONS) CASH FLOW - GOOD
E. PROFITABILITY - GOOD
F. EARNINGS CAPACITY - GOOD
G. PRICE-EARNINGS RATIO (P/E) - (SEE: Comments)
H. FINANCIAL HEALTH - GOOD
I. MARKET CAPITALIZATION - GOOD
J. TRADED VOLUME - GOOD
 

A. MANAGEMENTS EFFECTIVENESS - GOOD

How well a company performs generally - in the provision of its products and services, its operations, controlling costs, market place, its profitability, stock market, and the like - depends on its management's efficiency. There are three popular measures of management's effectiveness: Return on Equity ( ROE), Return on Assets (ROA) and Return on Investments (ROI). These measures are expressed as a percentage and are used as a general indication of the company's efficiency. ACE'S looks for companies whose ROE, ROA and ROI are high (in double digits generally) and growing.

IMMUCOR INC.'s ROE (TTM), ROA (TTM), ROI (TTM) are 16.02%, 11.89% AND 14.25%.


B. PRODUCTS & SERVICES - GOOD

Products and services is the factor that enables a company to connect with its market and generate sales. What products and services the company has in the market and how successful those products and services are received in the target market are very important factors in considering a company's stock for investment.

IMMUCOR Inc.'s Products and Services: Blood bank automation; patented Capture® solid phase technology (an antibody screening and identification technology); reagents (Reagent Red Blood Cells, Blood Grouping Reagents, Anti-Human Globulin, Proficiency Kits); Specialty Products for Antibody Investigation; and a Tutorial Program for the continuing education of technologists who want to broaden their understanding and learn new skills in the field of red cell serology).

There is one quantified data that would enable us to tell how well IMMUCOR Inc.'s products and services are received in its target market - the company's sales.


C. SALES - GOOD

Sales is an important indicator on how a company's products and services are received by the consumers. We could say that sales is how the consumers actually "votes" on the competing products-and-services that are in the marketplace. The magnitude of a company's sales figure is important as is the growth of the sales figure from year-to-year. Generally, a high sales figure is preferred than a lower figure. Also, a steady and appreciable growth in a company's total sales from one year to the next is a key indicator on how a company is able (or unable) to sustain and improve the utility of its products and services in the marketplace.

An appreciable sales and sales growth is crucial to the health and long-term survival of a company.

IMMUCOR INC.'s (past 12 months) Sales of $112.8M is substantial and, more importantly, about 41% higher than the Industry's Sales of $86.9M. Since 2002, Immucor have maintained an average sales of $98M annually: $112.6M in 2004 (or 33.89% gain since 2002). $98.3M in 2003 (or a 16.89% gain since 2002), and $84.1M in 2002. In terms of growth, Immucor's Sales is 18.90% (for the past 12 months) while the Industry is 11.90%.


D. (OPERATIONS) CASH FLOW - GOOD

Cash flow is crucial to the operation and survival of companies. A company having ample ready cash ensures that creditors, employees, and others can be paid on time. Cash flow could be considered as a better measure of a business's profitability than earnings, because a company can show positive net earnings and have insufficient cash flow (that is, the company is not able to pay its debts). Cash Flow thus can be used as an indicator of a company's financial strength.

Since 2002, IMMUCOR, INC. have maintained an average cash flow of $19M annually: $22.7 in 2004 (or a 73.28% gain since 2002); $20.3 in 2003 (or a 54.96% gain since 2002); and $13.1 in 2002.


E. PROFITABILITY - GOOD

Making a profit is the ultimate goal of every company. A useful gauge of a company's profitability is its profit margin. The margin measures how much out of every dollar of sales a company actually keeps in earnings. A higher profit margin indicates a more profitable company that has better control over its costs compared to the competitors in the industry. The higher the margin the better it is for the company. Investors can look at margins to assess the quality of a company. If a company is increasing its margin over time, it is earning more per dollar of sales. This ratio helps to give investors and idea of management's ability to control costs and expenses relative to the company's business operations.

Operating margin is a variant of profit margin. Operating margin indicates how much out of every dollar of sales the company makes, before interest and taxes. Another variant of profit margin is "Gross margin" and is defined as Gross Income divided by Net Sales.

IMMUCOR's Profit Margin is 11.67% (TTM - Trailing 12 Months); Operating Margin is 20.19% (TTM); and Gross Margin of 55.61% (TTM).


F. EARNINGS - GOOD

Net income is a company's total sales less total expenses (that is, expense factors for costs of doing business, depreciation, interest, taxes, and other expenses) for a specific period. Net income (also referred to as "earnings") is a measure of a company's profitability. Related to a company's outstanding shares of common stocks, the company's total earnings is transformed to "earnings per share" (or "EPS" for short). EPS is a very popular indicator of a company's profitability and a powerful variable that influences the price of a company's stock.

IMMUCOR's Income (for the past 12 months) was $14.6M as opposed to the Industry's -$14.3M. Since 2002, Immucor have maintained an average total net income of about $12M annually: $12.5M in 2004 (or 42.05% gain since 2002); $14.4M in 2003 (or a 63.64% gain since 2002); and $8.8M in 2002. The Company's Income Growth (for the past 12 months) was 28.70%. (The Industry's Income Growth is not available).

Since 2002, the Company have maintained an average Earnings/Share of $0.27 annually: $0.27 in 2004 (or a 17.39% gain since 2002); $0.32 in 2003 (or a 39.13% gain since 2002); and $0.23 in 2002.

During the last 5 years, the Immucor's Earnings Growth Rate of 30.30% have outperformed the Industry companies' rate of 18.60% and the S&P 500 companies' rate of 3.20%. In 2005, Immucor's projected Earnings Growth Rate of 98.80% will significantly outperform the Industry companies' rate of 16.00% and the S&P 500 companies' rate of 20.30%. In 2006, Immucor's projected Earnings Growth Rate of 84.00% will significantly outperform the Industry companies' rate of 20.70% and the S&P 500 companies' rate of 6.90%. In the next 5 years, Immucor's projected Earnings Growth Rate of 22.50% will outperform the Industry companies' rate of 16.30% and the S&P 500 companies' rate of 6.00%.


G. PRICE-EARNINGS RATIO (P/E)

A stock's Price-Earnings ratio tells us roughly how much investors are willing to pay per dollar of earnings. Price-Earnings is a ratio of a company's current share price compared to its per-share earnings. The P/E ratio is a much better indicator of the value of a stock than the market price alone.

In general, a high P/E means high projected earnings in the future. As such, the P/E ratio could be interpreted as the reflection of the market's optimism concerning a firm's growth prospects. To determine whether a particular P/E is high or low, take into account a company's growth rates; and the P/Es of other companies in the same industry. Historically, the average P/E ratio in the market has been around 15-25.

IMMUCOR Inc. has a P/E ratio of 23.16, within the market's average, when it was selected in October 2002. Currently (as of April 2005), IMMUCOR's P/E of 97.10 is on the high side.  IMMUCOR's P/E of 23.16 when the stock was first selected in October 2002, was good.  At the current P/E level of  97.10, ACE'S withholds selection of IMMUCOR for investment.


H. FINANCIAL HEALTH - GOOD

The assumption of debt, i.e., financial leverage, are used by companies to finance its assets. The magnitude of the debt's expense component affects the company's net income.

A company with significantly more debt than equity is considered to be highly leveraged. A popular measure of financial leverage is the "debt/equity ratio". A higher debt/equity ratio generally means that a company has been aggressive in financing its growth with debt. This higher ratio can result in volatile or negative earnings as a result of the additional interest expense. Thus, the Debt/Equity Ratio is popularly used as a measure of a company's financial health.

IMMUCOR's Debt/Equity Ratio (latest 12 months), is 0.05. Vis-a-vis the industry's ratio of 0.26 and the S&P 500 companies' ratio of 1.21, Immucor's ratio of 0.05 is excellent.


I. MARKET CAPITALIZATION - GOOD

Market Capitalization (or market cap for short) is a measure of a company's size. The market cap provides a broad gauge of the growth-versus-risk potential of a company. Historically, large caps have experienced slower growth with lower risk; whereas small caps have experienced higher growth potential, but with higher risk.

The market cap of a company is calculated by multiplying the number of its outstanding shares by the shares' current market price. There are presently six classes of Market Cap: Mega Cap, Big/Large Cap, Mid Cap, Small Cap, Micro Cap and Nano Cap.

Immucor is a mid-cap company (as defined by Reuters) with a market capitalization of $1,329.28M with outstanding shares of 45.09M.


J. TRADED VOLUME - GOOD

A stock's price goes up or down based on the laws of supply and demand. Simply stated, when a stock's price goes up, there must be significant buying demand for the stock. Volume is the actual number of shares traded daily. Traded volume could be used as a gauge of the demand for a stock. Average Volume is the 50-day moving average of daily volume as computed by Vector Vest.

IMMUCOR Inc. has an Average Volume of 423,800 shares traded per day

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