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Technology Stocks : Intermagnetics (IMG)
IMG 0.229-1.0%Nov 3 3:53 PM EST
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To: RMP who wrote (3416)5/12/2001 5:36:33 AM
From: Fisherman1   of 3448
 
AMSC v. IMG
by: creede101 05/11/01 06:30 pm EDT
Msg: 4625 of 4625

Relative to AMSC, Kid posed the following question on the AMSC message board:

Let me ask the board the following: "I own a company which will lose $33 mill this year and maybe $100 mill in aggregate over the next 5 years. Then it might become great company. What will you offer me for it today?"

I am not sure how to answer that. But I wouldn't pay $500 mill (the current market valuation of AMSC). Would you?

Relative to IMG, the question is:

Let me ask the board the following: "I own a company which will have INCOME of $16 mill this year and maybe $143 mill in aggregate INCOME over the next 5 years (based on 20% growth rate). Then it might become great company. What will you offer me for it today?"

Based on today's closing share price of 27.85 and 15.4 mill outstanding shares, IMG's current valuation is $429 million.

Thus IMG has both a lower price and much better near-term prospects. Moreover, IMG is basing its HTS future on second generation wire, while AMSC is betting on first generation wire. No wonder, IMG's CEO takes most of his compenasation in the form of stock options, while AMSC's CEO receives mostly cash. Can there be any doubt as to which stock is the better RELATIVE buy at current market prices? Moral: for those that want a hedged bet, buy IMG and short AMSC at current price levels.

Note: This post is being placed on both the AMSC and IMG message boards.
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