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Anyone noticed the run-up in Visx the last 2 weeks. It sure seems that some big buying has been coming back into the stock. As of
September 15, the short interest had remained the same at around 1.4 million shares (as reported on August 15). I wonder if the latest buying is new purchases or short covering? Today's volume was very high with the stock dropping early and coming back near the end on over 600,000 shares. Hopefully, some big money is taking on Atlantis Research's short position in Visx.
I know many on this board seem to be enamored with Summit because they seem cheap, but I would watch out. I don't really understand Summit's business plan right now. For the next year they will be bleeding money at their centers and manufacturing operation. Many want Summit to abandon manufacturing and focus on the centers, and collecting PPP. I'm not sure what they should do, but unless PRK really takes off ahead of projections over the next year, I don't see many reasons for mutual funds to jump back into Summit. As for Visx buying Summmit, I don't believe it will happen. The only thing that Visx wants from Summit is the patents licensed to PPP. Visx doesn't want the lawsuits, the centers, Lens Express, or their manufacturing.
As for expectations, Visx has stated that they expect to exceed the 70,000 procedures expected in 1996. For 1997, they are expecting 200,000 procedures. They also expect to sell roughly 100 - 120 machines/year. This first year I believe they are ahead of that with roughly 100 machines in the U.S. now, or about 75 placed since approval.
Visx earnings should be excellent for the forseeable future. Last quarter was $.28/sh on $19.5 million rev. This quarter should do as well or better. And if the 200,000 procedures is met for next year then PPP royalties will be $28 million - PPP overhead (a few percent to ten percent depending of lawsuits, etc). And machine sales should contribute $1/sh earnings. So it appears Visx will be showing steady increasing earnings while Summit will be hard pressed to breakeven for the upcoming year.
With the recent trading patterns it seems that analysts are starting to get the picture that Visx is a very different company than Summit. Maybe part of the reason for the recent run-up was due to Mark Logan meeting with Analysts in New York last week. Also, a brokerage firm Hannifan (sp? same company following ATCI) initiated coverage on Visx with a buy recently. |
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