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Strategies & Market Trends : Three Amigos Stock Thread

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To: Amigo Mike who wrote (6790)	7/14/1998 2:54:00 AM
From: Cary C	Read Replies (2) of 29382

AIRM..... Well amigo I must admit that I for one hadn't expected nor am I sure I agree or understand the revised number from Red Chip on AIRM. The only thing I can come up with is that in their discussions with management, the anticipated revenues from Mercy are getting started slower than they had anticipated. On the other hand I was not led to believe this was the case during the conference call. I know Jim Wright listened to the conference call also ( Jim did you draw the same conclusion as myself?). I personally have not seen the Red Chip report but it is my understanding that everything was very good with the exception of the earnings revision. That being the case, a closer look at the numbers still says that this stock is growing and moving in the right direction. Maybe not as fast as some of us would like it to, but.... last year the company did .22. Even with the new numbers of .36, that is 61% growth for the year. I would think it would be fair to say that AIRM should be given at least a growth PE multiple of 15 to 20. That would put them between $5.40 and $7.20 at years end. From close today that would be a gain from 21% to 40% ( not necessarily your gain from purchase price but your gain from if you sold at these levels ). A case can also be made for .36 not being the real number even if it is what they actually come in at do to the one time crash settlement that contributed to most of the .11 from last quarter. When subscribing to this line of thought you must also consider two other things, 1. Costs associated with the crash totaling approximately 350k ( I think that was the number)were one time charges. 2. AIRM depreciates the helicopters at a higher rate thus lowering the profit dollars for the quarter ( I personally disagree with this very conservative approach. Although in this instance they were able to recognize a gain instead of a loss from the crashes so far be it for me to question management). Backing out the approximate .07 for the reimbursement pertaining to the crash they still would have done .04, a 300 % increase from the previous first quarter. Even if they just do .06 this coming quarter, it is still an increase of 20% from the previous second quarter. Cary

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