Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Biotech / Medical : Arterial Vascular Engineering AVEI -- Ignore unavailable to you. Want to Upgrade?

To: Walk Softly who wrote (190)	4/28/1998 10:54:00 AM
From: Goolie2	Read Replies (1) \| Respond to of 410

Adam who? my feelings exactly. Here are some analyst comments that a hedge fund manager forwarded me. I believe they may be by Cowen but I'm note sure. They were dated 4/27: "ARTERIAL VASCULAR ENGINEERING. AVE shares have been weak over the past week and a half with the share price eroding 16.5%. We believe that AVE shares have been weak for many of the same reasons as Guidant, including: (1) momentum investors exiting the shares, and (2) uncertainty regarding profitability as Boston Scientific is expected to launch its NIR stent in mid-1998 in the U.S. We continue to believe that AVE story remains compelling at these levels for several reasons. (1) With the recent launch of the gfx stent in the U.S., sales have accelerated from March levels. (2) Given the breadth of the company's stent product line and early positive indications from Europe regarding the gfx II stent, we believe that AVE still has the technology advantage in stents. (3) With $106 million in U.S. stent sales in the March quarter, we believe that gross margin as reported was artificially low. We estimate that gross margin could have been closer to 88% versus the 80.5% reported in the March quarter. If gross margins were normalized, we estimate that AVE could have generated an additional $0.16 in earnings. In addition to the gross margin leverage, we believe that the company undertook significant forward spending in the March quarter as SG&A tripled on a sequential basis. With another strong quarter expected, we suspect that the company will be in a position to undertake further forward spending and insure sequential earnings gains throughout calendar 1998. (4) The company continues to hold a leadership position in the European market and is enjoying early success in Japan. With AVE competing against all of the newest stent designs, we believe that the leading market shares bode well for the U.S. (5) Valuation remains compelling with the shares trading at 12.5 times our calendar 1998 estimate of $2.65. We continue to recommend purchase of AVE shares with a $50 price target." Sounds good to me. Good luck, Goolie