LMA drops after Credit Suisse downgrades the stock

Credit Suisse is downgrading the EPS forecast of medical device manufacturer LMA International by 11% for the year 2006. The downgrade is due to LMA's investment in developing a 'rest-of-the-world' distribution network which would hurt earnings in the short term as costs increases and revenues are 'disrupted'. Credit Suisse, however believes that long term prospects would be brighter and that 'higher growth rates' can be expected upon this expansion.

The downgrade from 'Overweight' to 'Neutral' resulted in the drop of shares of LMA to fall by 2.8% to end the day at S$0.865. Upon market opening today, the shares of LMA has continued to drop to last trade done at S$0.845. However with long term prospects of the company to remain intact as a result of its product differentiation strategy and its win of a lawsuit against industry giant Tyco, investors could look to buy into the company at around S$0.82-0.83.