Research Rec.: Meridian Bioscience (VIVO) at $18.21

WARNING: The consideration of this stock can only be done with an understanding that we're in a bear market. Please carefully consider the downside risks mentioned in this research recommendation before taking any actions. Despite the qualitative nature of this company, the purchase of this stock should be considered speculative at this point in time.

As I mentioned in my sell recommendation of Helmerich and Payne (HP), I have been anticipating the opportunity to buy Meridian Biosciences (VIVO) for over 3 years now. According to Morningstar.com, VIVO, "...manufactures disposable immunodiagnostic test kits used for the rapid diagnosis of infectious diseases. Its products aid in the diagnosis of gastrointestinal infections, mononucleosis, ulcers, urinary-tract infections, respiratory infections, and strep throat."

As a Dividend Achiever, VIVO has increased its dividend every year for 16 years in a row according to MergentOnline. Yesterday March 25th, VIVO plumbed a new low after reaching a peak of $37 in April 2008. According to Dow's theory, VIVO has the following upside and downside targets:

Upside-

• $23.33
• $30.16
• $37.00

Downside-

• $11.29
• $ 5.65

Again, considerable attention must be directed at the prospect for the downside risk since we are in a bear market. Anyone buying this stock should be willing to accept that this company can easily go down to the $11.29 or $5.65 level or a loss of 38% and 69% respectively.

The fundamentals about this company are exceptional like little debt, double digit return on equity and return on assets and an astounding dividend growth rate. Your research of this stock might convince you to buy right away. However, the biggest red flag warning about this company is that the dividend payout ratio is very high at 91%. At some point this has to start going lower or the company may have to dip into it's cash reserves, borrow or cut the dividend altogether.

Aside from all the homework that you have to do before you consider this stock, I would like to draw your attention to the comparison chart below of VIVO's stock price to that of Google (GOOG). While these companies are in unrelated industries both GOOG and VIVO appeal to investors as demonstrated by the eerily similar stock price movement. From the IPO of GOOG back in August 19, 2004 to the most recent peak, GOOG and VIVO appreciated 639% and 665% respectively. However, when the downturn came GOOG fell hard and fast down 67% at the low while VIVO is down 56% from the high. The distinction, of course, is that VIVO will pay a portion of earnings to you the shareholder while it struggles through this economy and GOOG will only promise that things are going to get better as the shareholders hope that the price will go up.

I have bought shares of this company for the long term if the stock falls. While you're doing your research of this company, it is hoped that this stock continues to fall so that you can get a better price than mine. As with my purchase of HP, if VIVO miraculously increases in value, I will consider selling only if my gain has been exceptional and a better alternative presents itself at the same time. If you're unclear about my investment philosophy and approach please review my "About This Site" section. Touc.

SELL Helmerich and Payne (HP) at the Market

The time has finally come to issue a SELL recommendation for Helmerich and Payne (HP.) The stock has performed moderately since the research recommendation was issued on March 10, 2009. It is highly recommended that anyone who bought the stock based on my research should re-read the posting. From the current level of $26.13, HP is poised to reach the $30 level with no effort. However, the returns that this stock has provided in the last 16 days say that it is worthwhile considering alternatives. Later today I will present an alternative Dividend Achiever that I have personally been anticipating for over 3 years.

HP was recommended when it was trading at $22.55. As of Thursday March 26th, HP was quoted at $26.13. This equals a return of 15.88%. Conservatively, on an annualized basis this would equal approximately 380% return. Selling this stock now also generates a return 17.6 times the amount of the dividend yield if the stock was held for a whole year.

It is always recommended that when selling a stock, one should not place an order after hours or when the market is closed. This leaves the seller in the position of being vulnerable to the whims of the market makers. Instead, place your sell orders only as a market order during market hours. Some would complain that a market order during market hours might leave some profits on the table. However, I would rather leave some money on the table rather than have it taken away from me by the trades that are placed by institutions and market makers. Touc.