Here is why I think GZSP is worth $20, without any cash on the books.
We all know the following:
1)$10 a share in cash, trades at $6.5
2)Valuation on a simple basis is $20 a share outside of cash
3)Spin-off, no analysts
4)Insider buying
However, analyze the different parts of the company. GZSP has five parts:
1)Plastic surgery equipment
2)Minimally invasive heart surgery equipment
3)Seprafilm (prevents adhesions which are fibrous bands that form around scar tissue after surgery, bad shit causes obstructions, estimate they cost health care industry $1.4 billion in postoperative problems)
4)GeneGraft, about to enter phase I, uses gene therapy to develop blood vessels in heart, check out CLTX for comparable valuation?
5)Cell Therapy - preclinical, uses cells in your body to regenerate scarred heart muscles.
Valuing Seprafilm at 3 times 2000 sales ($60 million), Plastic surgery and minimally invasive heart equipment at 2 times sales ($180 million). Rigth there you get $240 million.
Add $50 million for the Gene therapy $25 million for cell therapy and you have another $75 million, yielding nearly $20 per share valuation without the $150 million in cash. If you look at the comparables you will see that my assumptions are way too conservative.
Also note that CTSI, who makes minimally invasive heart surgery products just got bought out for 10 times trailing sales.
The fair value of this company is at least $25, and if things go well it should go to $30. |
