US Oncology(USON) Message Board

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Biotech / Medical : US Oncology(USON)

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To: Geriq who wrote (53)	2/24/2000 12:53:00 PM
From: drstox	Read Replies (1) of 75

The $20 figure is based on two considerations: As soon as cash flow can be reasonably projected to return to its trend, based on a discounted Free Cash Flow to Equity (FCFE) model the fundamental value of the stock should be between $20 to $30. The second consideration is that when cash flows were consistently growing according to the trend, the market valued the stock from time to time near its fundamental value. The historic evidence indicates it will do so again. The company is basically a well-managed company that has gotten beaten up by the whims of Congress and rising drug costs. I assume USON will figure out how to manage the rising drug costs, and I am banking on Congress beefing up Medicare to get support from the AARP (the single most important and effective voting block) in the upcoming elections. I think $20 in 12 months is optimistic, but possible, and 18 to 24 months is realistic. The only thing that has me worried is that the company is slow at getting their numbers out and they are conspicuously silent. That either means they are overly conservative in their PR or the financial news is worse than expected.

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