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Metropolitan Health Networks Inc. Message Board

  • uptabdowntab uptabdowntab Dec 1, 2010 4:31 PM Flag

    Simple Case for MCZ = $8

    The most accurate way to value a company relative to its peers is based on either PS ratio or a multiple of EBITDA. For now ignore growth rates, history, management, and all else.

    Based on ttm sales, MCZ has a PS of .35 and competitors/peers are at 1 to 2 meaning MCZ needs to go up 5X to get to a fair valuation.

    (Even if you ignore peers and instead compare to any run of the mill company, most will sell for a PS=1 or EBitda multiple of 7 or 8....meaning we are still trading at half to one third value verses a very conservative measure.)

    Based on ttm ebitda, MCZ trades at a multiple of about 3.5 while competion is at 10 to 20 meaning MCZ again needs to get to the $4 range to be valued fairly.

    Now this is where it gets fun, if you throw PE ratio and growth rate into the equation you can certainly justify premium multiples. Not today, but if they deliver over the next few quarters then Yes. Makes it pretty easy to see this as a $10 stock in 18 months....IF the company performs.

    Today was encouraging but the real fun begins when we hammer through about 1.5...then it is up up and away.


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