Packer16 Posted September 5, 2014 Author Share Posted September 5, 2014 You are correct. That is why I am still holding on. Packer Link to comment Share on other sites More sharing options...
yadayada Posted September 5, 2014 Share Posted September 5, 2014 I guess I annualized last quarter, and I got 130. So I guess they will keep cutting additional costs? Link to comment Share on other sites More sharing options...
Packer16 Posted September 5, 2014 Author Share Posted September 5, 2014 There is some seasonality in the cash flows. Packer Link to comment Share on other sites More sharing options...
phil_Buffett Posted September 5, 2014 Share Posted September 5, 2014 50-100% premium and they can have my Shares. otherwise not ;D Link to comment Share on other sites More sharing options...
gary17 Posted September 5, 2014 Share Posted September 5, 2014 It is interesting Mr. Market is excited but not super excited about the potential sale - with Oak Tree owning 44% I'd say there's quite a likelihood to see this deal go through if they are really looking for a buyer... How else would Oak Tree realize the gain being a significant shareholder? If they start selling - even just reducing it by 5% of shares outstanding I'd say AIQ will drop at least 10%+ So they either find a buyer who can do well with the cash flow or get the board to start dividend out the FCF to shareholders. Gary Link to comment Share on other sites More sharing options...
yadayada Posted September 5, 2014 Share Posted September 5, 2014 yeah so i guess it is trading at about 5x normalized FCF then? And almost 100% upside. And if they do not sell within 1 or 1.5 years they will start shelling out dividends and buybacks and you will see a rerate. I think current reason for discount is that this thing does not screen well right now. It trades at 6.7 last year's ebitda. Does not have earnings. loaded with debt (and no earnings!). Link to comment Share on other sites More sharing options...
investor-man Posted September 5, 2014 Share Posted September 5, 2014 It is interesting Mr. Market is excited but not super excited about the potential sale - with Oak Tree owning 44% I'd say there's quite a likelihood to see this deal go through if they are really looking for a buyer... How else would Oak Tree realize the gain being a significant shareholder? If they start selling - even just reducing it by 5% of shares outstanding I'd say AIQ will drop at least 10%+ So they either find a buyer who can do well with the cash flow or get the board to start dividend out the FCF to shareholders. Gary This is some solid logic right here Link to comment Share on other sites More sharing options...
PullTheTrigger Posted September 8, 2014 Share Posted September 8, 2014 8K filed today says company is not for sale: "Recent reports have surfaced regarding the possible sale of Alliance HealthCare Services, Inc. (the "Company"). As a matter of course, the Company does not respond to rumors or speculation. There are currently no active plans or processes underway to sell the Company. " Link to comment Share on other sites More sharing options...
yadayada Posted September 8, 2014 Share Posted September 8, 2014 so what happened here, someone in the company leaked it? Link to comment Share on other sites More sharing options...
Laxputs Posted September 9, 2014 Share Posted September 9, 2014 1. Why is MI at 14 here? Isn't it 47? Interesting. I must be doing something wrong because I get almost a double at 7x EBITDA. Here's my back of the envelope calcs: EV/EBITDA calc is Debt + Market Cap + Minority Interests - Cash = (500 + 318 - 14 - 31) / 150 = 5.15 And with the 7x multiple that implies an increase in Market Cap (773 + X)/150 = 7 ==> X = (7 * 150) - 773 = 277 And there are 10.63 shares outstanding, so 277 / 10.63 = $26 additional per share. So just to check my work the new share price would be ($29 + $26) = $55 The new market cap would be $55 * 10.63 = 584.65 EV/EBITDA = (500 + 584.65 - 14 - 31) / 150 = 6.931 (so roughly correct). What am I missing? 2. Excluding valuation, why AIQ over RDNT? 3. Can anyone predict with a reasonable degree of certainty, where the market for outsourcing advanced radiology and radiation oncology will be in 5 years and do so in light of management's forecasting that MRI services (their largest service at 42% of revenue) will continue to reduce yoy due to high unemployment and uninsured workers? What is to stop MRI and all of radiology from continuing its decline? TIA Link to comment Share on other sites More sharing options...
investor-man Posted September 9, 2014 Share Posted September 9, 2014 1. Why is MI at 14 here? Isn't it 47? You are correct'ish. It's 45.3 as of the latest quarter. Thanks for catching that. Recalculating, I see $20/share additional instead of $26. Link to comment Share on other sites More sharing options...
Laxputs Posted September 9, 2014 Share Posted September 9, 2014 4. If management is predicting about 445 revenue in 2014 and Radiation Oncology (RO) is forecast around 93mm, then I have around a 5% YOY decline in MRI/PET/CT scan revenue. How does one invest without knowing when their largest revenue segment will stop declining? There is no certainty RO can grow indefinitely to make up the difference. I won't invest in a company where their largest revenue segment is declining and management is expecting that decline to continue. Link to comment Share on other sites More sharing options...
Packer16 Posted September 9, 2014 Author Share Posted September 9, 2014 It is interesting the press release may imply that Oaktree thinks a turnaround would generate a good amount of CF growth and generate a higher selling price than selling the business today. They have held this since 2007 so there investment period has to be close to an end. Packer Link to comment Share on other sites More sharing options...
plato1976 Posted September 12, 2014 Share Posted September 12, 2014 otherwise we should not be at the current valuation :) 4. If management is predicting about 445 revenue in 2014 and Radiation Oncology (RO) is forecast around 93mm, then I have around a 5% YOY decline in MRI/PET/CT scan revenue. How does one invest without knowing when their largest revenue segment will stop declining? There is no certainty RO can grow indefinitely to make up the difference. I won't invest in a company where their largest revenue segment is declining and management is expecting that decline to continue. Link to comment Share on other sites More sharing options...
Laxputs Posted September 12, 2014 Share Posted September 12, 2014 otherwise we should not be at the current valuation :) Fair enough. And it's for this reason I'm not investing. I don't like the mystery of where declining sales are going to end, even if I think they will curtail them eventually. I'll wait for the bleeding to stop. Link to comment Share on other sites More sharing options...
Packer16 Posted September 12, 2014 Author Share Posted September 12, 2014 I am not sure what bleeding you are referring to. If you look at the FCF generated over the past 10 years there is quite abit of green (it has generated more than its current stock price in FCF over the past 5 years): http://financials.morningstar.com/ratios/r.html?t=AIQ®ion=usa&culture=en-US This is not going to be a great growth stock but if they maintain (which they have been able to do) or even grow FCF you are going to do well. Now it is trading for less than 5.1x EBITDA (when take out multiples are at 7x Plus) and 4.6x FCF and cheaper than its closest comp Radnet. You also have Howard Marks as the majority owner. Any cheap stock is going to have hair on it except in a panic so you have to choose what hair you are comfortable with. Packer Link to comment Share on other sites More sharing options...
LesPaul Posted September 12, 2014 Share Posted September 12, 2014 Back to where I was in Nov 2013 - but I'm not terribly unhappy. Perhaps we would have been better off without the insider "rumors"! Link to comment Share on other sites More sharing options...
Laxputs Posted September 13, 2014 Share Posted September 13, 2014 Yeah if they maintain or grow FCF it will do well. I would like to see MRI/PET/CT stabilize or know that RO can make up the difference in revenue. I don't see why it would re-rate in the meantime. If at next quarter PET/CT have stabilized and MRI shows another flat QOQ, then I would buy in if it hasn't appreciated in price much. There is a good chance I'm being too conservative here. I think it's likely MRI continues to be flat and RO growth offsets PET/CT decline. But I think I don't lose much waiting to see if that happens next quarter. That's all I'm concerned about. Link to comment Share on other sites More sharing options...
yadayada Posted September 13, 2014 Share Posted September 13, 2014 im not sure if one quarter is really a meaning ful sample size. If fair value is 10x FCF then that is 1/40th of that sample size (assuming 10 years) Link to comment Share on other sites More sharing options...
plato1976 Posted September 13, 2014 Share Posted September 13, 2014 But the revenue drop from 2011 is quite significant Did they sell some business? I am not sure what bleeding you are referring to. If you look at the FCF generated over the past 10 years there is quite abit of green (it has generated more than its current stock price in FCF over the past 5 years): http://financials.morningstar.com/ratios/r.html?t=AIQ®ion=usa&culture=en-US This is not going to be a great growth stock but if they maintain (which they have been able to do) or even grow FCF you are going to do well. Now it is trading for less than 5.1x EBITDA (when take out multiples are at 7x Plus) and 4.6x FCF and cheaper than its closest comp Radnet. You also have Howard Marks as the majority owner. Any cheap stock is going to have hair on it except in a panic so you have to choose what hair you are comfortable with. Packer Link to comment Share on other sites More sharing options...
moody202 Posted September 16, 2014 Share Posted September 16, 2014 I got in shade below 29 and the recent drop is really testing my patience and self control! Link to comment Share on other sites More sharing options...
phil_Buffett Posted September 19, 2014 Share Posted September 19, 2014 i bought more today Link to comment Share on other sites More sharing options...
phil_Buffett Posted September 22, 2014 Share Posted September 22, 2014 i again bought more Shares, loading up :D Link to comment Share on other sites More sharing options...
LC Posted September 26, 2014 Share Posted September 26, 2014 Bought a bit at this level. Anyone else? I hope I am not missing something, although I'm not sure what it could be. Link to comment Share on other sites More sharing options...
LanceSanity Posted September 26, 2014 Share Posted September 26, 2014 I'm buying a bit as well. This reminds me of the price action from last November. Maybe some traders don't use limit orders or lots of traders in this use a stop loss. Link to comment Share on other sites More sharing options...
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now