Down about 20% in a few months. market has overreacted to the possibility that Altace patent might be invalidated early which is set to expire in April 2009.
Cash flow has grown about 25% per year for the past seven years. Altace currently makes up 32% of sales.
Assuming no further growth the current cash flow discounted to present value valued KG at almost double the current price. Subtracting 100% of the altace sales makes KG still undervalued by greater than 30%. A great bargain for a company with a good history of increasing cash flow. Seems likely to grow at least 50% in the next two years.
$16.93 (07/30/07)
