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American Shared Hospital Services Message Board

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  • mmmparsley mmmparsley Nov 11, 2009 11:08 AM Flag

    Jeez, what is going on

    Over the last few days I've tried to put a fair value on AMS, but I think it's just about impossible before waiting to see what happens and how much positive cash flow (receipts from per use fees - amortized cost of machines, which is roughly equivalent to paying down interest and principal to their lender) they can generate in their new model of financing much more expensive and, highest-tech machinery.

    It's hard to argue that this stock hasn't taken on significantly more risk, but with significant risk comes significant reward. It's also extremely hard to fairly value Still River systems and AMS's 3.6% interest in the company. For instance, If they sold 5 machines a year, they would have revenues of about 125 million? What multiple would you put on sales for a company like Still River? You'd think the multiple would be pretty high if they can get an FDA approval for a machine that offers significant cost efficiencies over other already highly profitable PBRT machines.

    I think any theorized value of this company right now, at least one that is over book value, is a complete shot in the dark. Of course, there are limits, but I think the limit is probably somewhere around $5.00 for GK financing (including balance sheet cash, net equity), $5.00-6.00 for PBRT/igrt financing, X.xx for operating room of the 21st century (we'll assume 0), and $2.00 for partial ownership of SRS (imagining a potential IPO would generate $200,000,000.00 {two hundred million dollars}).

    IMO, the ceiling is around $13.00 per share. Lowest model I can come up with is about $3.00 for GK financing, .50-1.00 for PBRT financing, and .25 cents for SRS.

    So, although it's a complete shot in the dark at this point, fair value seems anywhere between $3.75-$13.00.

    Any help here?

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AMS
2.43-0.08(-3.19%)Aug 19 4:00 PMEDT

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