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Biotech / Medical : Oxford Health Plan (OXHP)
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To: Premier who wrote (664)12/26/1997 3:09:00 PM
From: Michael Burry  Read Replies (1) of 2068
 
Any bank will gladly lend oxhp short term working capital loan.

Oh I don't doubt that. When I said junky, I meant that the rates would not be favorable.

Such an improvement in income statement
will give tremedous lift to margin of safety in the balance sheet.

We basically agree that the margin of safety will have to come from
the income statement at this point (in the form of supra-normal
margins/returns) . Investors 'round the world don't
mind that, so it is indeed a speculative buy. Even Graham acknowledged
that speculators serve a function.

Now that all the HMO's have been hit, those looking to play
the sector have to do wholesale new comparisons of the
major players. A strong balance sheet offers a present margin
of safety as well as the opportunity for acquiring solid
businesses on the cheap and expanding market share during
an industry recession.

My guess is the first to true national coverage will start racking
up enrollment gains and stealing share from the remaining
players.

Good Investing,
Mike
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