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A Financial Analysis of a Publicly Traded Health Care Company

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| HCM 385 | Jamea Kemple-Calambas | | A Financial Analysis of a Publicly Traded Health Care Company | | In this paper, I will use financial data and research of a publicly traded healthcare company to give an analysis of the selected company’s financial status. | The company I selected to analyze is a Biotech and a Cell Therapy healthcare company aptly named NeoStem, inc.. A History of NeoStem On January 19, 2011, NeoStem acquired Progenitor Cell Therapy, a cell therapy contract manufacturing company serving the industry from licensed, state-of-the art facilities in New Jersey and California. This event added to NeoStem over 100 years of collective experience in the business and science of cell therapy and its …show more content…

COMPARE SALES AND EPS GROWTH TO THE SAME PERIOD LAST YEAR: [FAIL] Companies must demonstrate both revenue and net income growth of at least 25% as compared to the prior year. These growth rates give you the dynamic companies that you are looking for. These rates for NBS (-14.29% for EPS, and 103.21% for Sales) are not good enough to pass. INSIDER HOLDINGS: [PASS] NBS's insiders should own at least 10% (they own 16.35% ) of the company's outstanding shares which is the minimum required. A high percentage typically indicates that the insiders are confident that the company will do well. CASH FLOW FROM OPERATIONS: [FAIL] A positive cash flow is typically used for internal expansion, acquisitions, dividend payments, etc. A company that generates rather than consumes cash is in much better shape to fund such activities on their own, rather than needing to borrow funds to do so. NBS's free cash flow of $-0.49 per share fails this test. PROFIT MARGIN CONSISTENCY: [FAIL] The profit margin in the past must be consistently increasing. The profit margin of NBS has been inconsistent in the past three years (Current year: -63.93%, Last year: -33.39%, Two years ago: -226.38%), which is unacceptable. This inconsistency will carryover directly to the company's bottom line, or earnings per share. R&D AS A PERCENTAGE OF SALES: [NEUTRAL] This criterion is not critically important for companies that are not high-tech or medical stocks because they

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