Check your numbers on EMITF.
I just read the EMITF thread a bit, and I got the following info, (which in some cases are approximations). The mistakes some of the posters made in their post here
Message 3525879
and elsewhere, was to adjust for the taxes due on the sale proceeds.
1. They bought Diasonics for $70M and sold about three years later to GE for $228M. Allowing for some expenses related to the sale, the before tax gain was thus about $150-155M, which after taxes gave them a net gain of $104M. The after tax proceeds (cash realized) is about 104+70= 174M. They have $40M in debt, so net cash is $134M. With about 21.5M shares out, this leaves net cash of about $6.24 a share. This is not a net-net with the stock selling at 8.
2. The company owns parts of two other companies that could be worth $2.50 a share (or more). So the cash plus other equity holdings could be $8.75 a share, a bit more than the current stock price. Their other businesses would increase the value of the stock even further.
It seems to me that the possible reason to invest, would be to get a piece of the action in a company that seems like a budding KKR or Hicks Muse (LBO firms). After all, they seem to have turned $30M in invested capital into $134M in after tax cash in three years. Not bad. But if this is the reason to invest, I'd need to do a whole lot more work analyzing the company.
I admit the analysis I've done so far, is pretty superficial and I could be quite wrong and low with my valuations.
Now that I've said this, I suspect these guys will go on and make you and them a fortune. Good luck.
Paul |
