Text size: Small font Default font Larger font

Have an account? Please log in.

TSI Network
Patrick McKeough is one of Canada’s top safe-money advisors. The Wall Street Journal, Forbes and The Hulbert Financial Digest have all recognized his ability to find stocks with hidden value. He is editor and publisher of The Successful Investor, Stock Pickers Digest, Wall Street Stock Forecaster and Canadian Wealth Advisor; inventor of the Quick Profit/Value System and the ValuVesting System™. A best-selling Canadian author, he wrote Riding the Bull, the book that predicted the 1990s stock-market boom.

Stock investing advice: Re-opened Chalk River reactor propels Nordion’s isotope sales

September 27, 2011 -  Be the first to comment
Posted by: Jim Bates Filed in: Investment Counsellor
  • Comments

Nordion Inc., Toronto symbol NDN, sells isotopes for cancer detection and research. It also makes products that sterilize food and surgical tools.

In its fiscal 2011 third quarter, ended July 31, 2011, Nordion’s revenue rose 39.5%, to $66.8 million from $47.9 million a year earlier (all amounts in U.S. dollars). Isotope sales jumped 79.9%, mainly because the Chalk River nuclear reactor near Ottawa restarted in August 2010 after a 15-month shutdown; this reactor supplies most of Nordion’s isotopes.

The company’s sterilization equipment continues to sell well. Nordion is also seeing strong demand for TheraSphere, a process it developed that treats liver cancer using millions of small glass beads that contain radioactive materials. Regulators in Canada, Europe, the Middle East and parts of Asia have already approved TheraSphere. This treatment will soon begin Phase III clinical trials in the U.S.

Thanks to the higher sales, Nordion earned $6.9 million, or $0.07 a share, in the quarter. That’s a big improvement over the year-earlier loss of $16.6 million, or $0.13 a share.

Stock investing advice: Reliance on Chalk River adds risk

The company bought back $40.5 million of its shares during the quarter. Nordion has now repurchased 63% of the shares under its current buyback authorization, which expires on January 25, 2012. Even after these purchases, Nordion holds cash of $69.0 million. Its long-term debt of $43.1 million is a low 8% of its $564.8-million (Canadian) market cap.

The stock has been trading at a reasonable valuation based on its expected earnings in fiscal 2011. However, its reliance on the aging Chalk River reactor adds risk. The $0.40 U.S. dividend yields 4.6%.

We gave our stock investing advice on Nordion in The Successful Investor Hotline for September 16, 2011, which you can view immediately when you take a 1-month free trial to The Successful Investor. Click here to learn how you can start profiting from The Successful Investor right away.

(Note: If you are a current Successful Investor subscriber, please click here to view Pat’s recommendation. Be sure to log in first.)

Be the first to comment

Permalink: http://www.tsinetwork.ca/?p=49382

All of our articles are available for republishing as long as you provide a link back to the original article.

Tags: , , , ,

  • Comments

Would you like us to inform you when new articles are posted?

What do you think? Go ahead and add your comment.

Please be respectful with your comments and help us keep this an area that everyone can enjoy. If you believe a comment is abusive or otherwise violates our Terms of Use, please click here to report it to the administrator.


Free Subscription to
The Successful Investor Network Daily

  • Daily investment advice you can act on
  • Free access to our special stock market reports
  • Plus much, much more! Try it today
Twitter Facebook
Follow TSI Network on Twitter and Facebook!

TSI Network Products

In today's economy, it's more important than ever to have clear investment advice that is tailored to your own personal goals. This is where Pat McKeough's conservative safe-investing philosophy comes in. Through TSI Network, you get access to reports, monthly newsletters and premium services that go beyond the daily headlines to give you all the advice and information you need to build a portfolio with long-term growth potential. Simply click on the links below to discover which service is right for you.