Drexel Hamilton analyst Brian Ruttenbur said Muddy Waters’ short report on OSI Systems “appears to be incorrect and poorly researched” and he recommended taking advantage of the pullback in the shares as a buying opportunity. The estimates by the short seller of the contribution of the company’s Mexico contract “appear to be illogical,” said Ruttenbur, who estimates Mexico generates profits closer to $30M of EBITDA, well below the short seller’s estimate of roughly $100M. Additionally, the report said they could not reach OSI management, but CFO Alan Edrick told the analyst that no one from Muddy Waters attempted to make contact. Ruttenbur reiterates his Buy rating and $105 price target on OSI Systems, which fell nearly 30% to $59.52 yesterday.
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