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Biotech / Medical : VD's Model Portfolio & Discussion Thread

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To: Andrew H who wrote (1998)	8/14/1997 1:52:00 AM
From: Vector1	of 9719

Any views on VISX. The company is one of two FDA approved manufactures of lasers used to correct vision. The process is called PKR and is safe and effective. The company has about $6 a share in cash and recieves a royalty for each proceedure performed. Equipment sales have slowed but royalty payments have increased. Royalty payments of course are the higher margin revenues and are what will drive EPS growth in the future. The company is profitable and will earn about 70cents a share this year. The stock was as high as 29 a couple of months ago and is in IMHO at an unjustifiably cheap level currently at 18 3/8th. Risks include various litigations revolving around VISX's parnership with its primary competitor Summit Technologies (this company sucks) in which they have agreed to split royalty revenue. In addition there are competing technologies which are in clinical development and illegal machines in the US for which VISX does not collect royalties. All in all I think its a buy at these depressed levels. V1

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