I went to the library today to review the Value Line writeup on BEAM. I am sad to say, it is not a very flattering piece. About the only postitive thing it had to say about BEAM was that it had a nice pile of cash on hand, from the sale of shares shortly after getting FTC approval for their laser a couple of years ago. The ? is how will they utilize this cash. The article stated that had it not been for the interest income from this cash pile, earnings would have been much worse.The article also went on to confirm what has been posted here, and that is that BEAM appears to be losing market share to VISX. As far as the pending litigation between BEAM and VISX, I think both will get beat up pretty bad.If VISX loses, they will have to make a sizable back royalty payment, as they have not been paying royalties into PPP since I think Oct. '97. This will have an adverse affect on earnings. If BEAM loses, they gain nothing, and it winds up costing them booco $$$$$$ in litigation. Currently, BEAM is like a rudderless boat, unsure of it's direction. I would expect to see the dissolution of PPP.
Should PPP dissolve, I think competition would heat up, possibly driving down costs to have these procedures performed, possibly resulting in more procedures. I think this bodes well for the eye treatment centers, such as LCAV and LVCI.
I am more confident that I have chosen to play this field correctly by buying shares of LCAV, after reviewing the Value Line write-up.
I would love to hear others thoughts on this scenario.....
GP |
