Cisco, I don't have a real strong feeling about ACMI one way or another, but just a couple of thoughts --
The Pap smear business is widely regarded as a zero-sum game -- a lab can only buy so much equipment, and if it buys from one company rather than another, the latter company suffers. I own Cytyc, and as far as I can see, it has a technology that is superior to all the others you covered. It is one of the two that is projected to make money next year, and it is projected to have a substantially higher EPS than ACMI. (Of course, analyst projections for companies like this are akin to witchcraft, but they are all we have to go on.)
And several recent studies do show that Cytyc substantially reduces the number of samples rejected as inadequate, which substantially reduces overall costs (which insurance companies like).
Also, I don't put too much importance on unanimous "buy" ratings -- stocks with a 1.00 rating are likely to be sparsely followed, with a few enthuastic analysts -- the more analysts you have, the more likely you are to find a single dissenter, which reduces your average. In this case, ACMI is followed by four analysts, according to Zacks, all with a "Strong Buy" rating, leading to a 1.00 rating. Cytyc is followed by seven analysts, five with strong buys and two with moderate buys, leading to a 1.3 rating. Do Cytyc's five strong buys trump ACMI's four strong buys? Or do the two Cytyc analysts with "only" moderate buys constitute a fatal flaw in the Cytyc case? I don't know that this comparison means much.
Finally, corporate restructuring to save costs in a small, growing firm is not a good sign in my opinion -- that's for the big guys with an established product line and bloated corporate expense accounts. If you are growing the top line at a dramatic pace (as small companies like ACMI and CYTC should be doing), you shouldn't be spending time counting postage costs. Restructuring argues a pessimistic outlook, and the need to hoard resources for tough times ahead. Of course, saving money is always good -- but to repeat my point, companies like this should be ramping up their expenditures and buying lots of new "stuff" to support expected new sales, not touting their cost-cutting efforts.
This may come out like an attack on ACMI, and I don't mean it to be. But I just don't see the case for investing in this stock -- the best technology will win in the end, and it doesn't appear to me that ACMI has it. This is all IMHO, and correct me if I am wrong. We're just talking here! :)
Chuck Edwards |
