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Microcap & Penny Stocks : Air Methods (airm) -- Ignore unavailable to you. Want to Upgrade?

To: Elliot Lepler who wrote (162)	12/24/1997 5:28:00 PM
From: Elliot Lepler	Read Replies (2) \| Respond to of 877

I hate posting consecutive messages but I do have something new in my hand. It is an update from the Brous analyst who follows Air Methods. As I expected she has lowered her earnings estimate for q4 to 9 cents and for 1998 to 47 cents. However she continues to recommend the company with a "BUY" rating. "We believe investors should consider Air Methods'strong business model...along with growth potential driven by expected consolidation in the air medical transport industry. Earnings have shown low, but improving visibility. In our view, sharp undervaluation makes AIRM compelling, attractive...." Separately she addresses the recent accident, expressing confidence that "While tragic, we expect this event will have a minimal impact on the overall maretability and credibilty of the company's services...We believe that AIRM will ultimately rebound when investors can weigh the implications of the accident without emotion over the tragic loss of life." The estimates and mid-year price target of $6 are without considering the recently announced Flagstaff contract and without any sigificant contribution from the manufacturing business. I believe that these numbers represent a conservative base case and that the Sikorsky and Boeing potential contributions add significant upside. The $6 target is derived from a PE multiple of 12 times the $0.47 earnings. With growth of earnings from 4 cents in 1996, 22 cents in 1997 and 47+cents in 1998, and the probability of growth at an annual rate of 20% in the coming years, the market should reward the stock with a multiple of at least 20. When this scenario becomes well known, we should see the stock reach my minimum objective of $10 per share. I welcome any comments. As I first wrote, I hate to answer myself and would like to hear the perspectives of others on this board. I wish all of you a very happy holiday season and a more prosperous 1998. Elliot