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American Science & Engineering Inc. Message Board

  • barryacohen barryacohen Sep 13, 2004 6:52 PM Flag


    The majority of osis sales consist of patient monitoring systems sold to hsopitals. osis recently paid $57 million to buy spacelabs --- a company that last year did $150 million in sales. why so cheap? only $1 of purchase price for almost $3 of sales? because spacelabs sales are declining. hospitals are reluctant to invest in capital equipment during a time of fiscal restraint. moreover, they prefer to get package deals on all of their equipment (cts, mris, linear accelerators, and patient monitoring equipment) from a giant like g.e., phillips or siemens. so why did osis decide to "diversify" away from the hottest market of all (homeland security) and into a stagnant field? Because they can't compete with ase. osis equipment is inferior. and now, in a classic waste of shareholders' money, osis will squander millions in a vain attempt to prop up their stock. it won't work. it never does, especially when the underlying business is weak. Osis = $10 stock. ase = $100 stock.

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    • As per my previous post, osis is a "joke" with a bleak future. osis has to waste its shareholders' money in a useless attempt to prop up its stock price. They have to "create" news by having the ceo "ring the opening bell" at nasdaq! big deal! ase has real news --- with more on the way. ase = $100 stock. osis = $10 stock.

    • bengrahamvalueinvestor bengrahamvalueinvestor Sep 13, 2004 10:41 PM Flag

      You are 100% correct about OSI making some major misteps. However, I MAY pick this one up on the speculation that the company is going to spin off the only piece of the company that is worth a damn---the security division. If this is done, which I think it will be, they will be the only other pure play for scanners etc. Here's a bit of a recent Morgan Keegan report on OSI

      "Upgrading shares of OSIS from Market Perform to Outperform investment
      rating based on valuation
      We are upgrading shares of OSIS from Market Perform to Outperform investment
      rating based on valuation. As of the end of Q4:04, OSI Systems' book value is
      $14.40 per share, and as of the end of Q3:04, its book value was $12.60 per
      share and tangible book value was $9.40 per share. Importantly, OSI Systems is
      considering strategic reorganization of the company potentially establishing stand
      alone entities from its two segments, Security and Opto/Medical. We believe the
      Security segment can create substantial shareholder value as a stand alone
      company. We value OSI's Security segment at 2.0 - 2.2x trailing revenue of $112
      million, or $224 million ($14.20 per share) to $246 million ($15.62 per share). In
      addition, while the company's Opto/Medical business is currently struggling, we
      value this division at 50% of its June quarter annualized run rate revenue. The
      company produced Opto/Medical revenue in June of $64.4 million, if this revenue
      is annualized it would be $257.6 million. We believe, even with the company's
      current problems, on a stand alone basis this division would be valued at 50% of
      this revenue, or $129 million or $8.16 per share. We value the total company on a
      breakup analysis between $22.36 per share and $23.78 per share. In addition, we
      believe additional orders in the Security segment will be coming down in the next
      few months that could boost our estimates in the Security division."
      Keep in mind though.....MK downgraded ASE after its lousy Q3/04 at a level about 1/2 of its current value. MK has been on the wrong side of a hot sector..."BUYS" on dogs that continue to run into problems-- and "Market Performs" on the cream of the crop.

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