Andrew.
It is always difficult to make specific recommendations. I can only give the reasoning I have for taking a SMALL position in ABTX.
Personally, I believe that the strategy of ABTX is complelling, and their performance to-date good. That said, I consider it a very risky stock for a number of reasons; no current earnings, limited track record, rapid planned growth, uncertain operating experience, future share dilution, etc., etc.
Concerning the valuation, the issue currently is trading a book value, and the a reasonable estimated P/E if acquisitions were to stop now, and they just ran what they already have (say 3% of revenues, which are now on the order of $50MM). So, balancing risk and reward, I thought a small purchase in the low 2's was justified.
It will be interesting to see how the story unfolds. |
