Isotope shortage still weighs on MDS

Article Excerpt

MDS INC. $9.62 (Toronto symbol MDS; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 67.2 million; Market cap: $646.5 million; Price-to-sales ratio: 9.0; No dividends paid since October 2006; SI Rating: Extra Risk) supplies medical isotopes for cancer detection and research. The company gets most of these isotopes from the Chalk River nuclear reactor near Ottawa. Atomic Energy of Canada Ltd., which operates the reactor, shut it down in May 2009 after it discovered a water leak. Atomic Energy should restart the reactor by the end of July 2010. Meanwhile, the shutdown continues to hurt MDS’s revenue and earnings. In its second quarter, which ended April 30, 2010, MDS lost $52 million, or $0.51 a share (all amounts except share price and market cap in U.S. dollars). A year earlier, it lost $6 million, or $0.06 a share. However, the latest earnings included a $27-million non-cash foreign-exchange charge. MDS recently sold its medical-instruments business and its early-stage drug testing operations. It received $669 million…