This evaluation is based on data obtained after Robertson, Stephens & Co. put out a "buy" recommendation for Jones Medical on November 1, 1996. The stock price at that time was $43 1/2.

Here are some facts about Jones Medical:

1. The trailing PE is 81 and even if the stock stays where it's at now the forward PE based on earnings estimates is still over 40.

2. On October 31 Jones Medical stated that its goal is to screen strategic acquisition opportunities to achieve 250 million dollars in annual sales by the year 2000. Again, even if the stock stays the same the company will have a market value five times its projected 2000 sales. That's crazy. Right now the market value of the company is fifteen times the last four quarters of sales.

3. The company only has equity of 133 million dollars and almost half of that is goodwill.

4. The recent price surge of the company's stock is unsustainable: 264% in 1995 and 306% in 1996.

5. The company is not improving performance based on new or innovative products, but by acquisition by issuing more stock which will dilute future earnings.

6. On October 31 the company reported a net income increase of 89% for the third quarter 96 over the same quarter in 1995. They excluded an acquisition charge of $5.7 million. If they would have included the charge the third quarter 96 earnings would have been a 54% decrease over the same quarter 1995. Why do you think they excluded the $5.7 million charge? You can check the SEC 10-Q yourself by going to the Edgar database and search under Jones Medical. You will see that 1995 third quarter was 13 cents a share and 1996 third quarter is 6 cents a share.

7. Robertson, Stephens, & Co. who is recommending the stock also did the last stock offering (4/96) for Jones Medical. Do you think they have a vested interest in recommending the stock?