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.

Technology Stocks : ProxyMed (PILL) -- Ignore unavailable to you. Want to Upgrade?

To: SuperCharged who wrote (77)	6/16/1998 3:53:00 PM
From: hoek	Respond to of 261

Obviously, someone is making a concerted effort to knock PILL stock off its feet and is succeeding. The information that is being distributed is well known to those who have followed the company for any length of time, and relates to the prices paid for acquisitions, the competition, and the legitimacy of the business model, Bellingham and Harold Blue. Consider ProxyCare ALONE, with Omnicare and Pharmerica-- the two of which represent 50% of the institutional pharmacy market with a combined 1,200,000 beds and average 10 perscriptions/bed. The deals are structured to pay PILL $3.50/bed/month and .15/perscription with a guarantee of roughly 10% penetration. ProxyMed should easily capture 20% of the business. 240,000 beds @ $3.5= $840,000/mo = $10.08MM/yr. 10 scripts/bed= 2.4MM times $.15 = $360,000/mo = $4.3MM/yr. With disgustingly high margins, like 85%. Just call it 70%, the two deals translate into a recurring stream of approx. .55-.70 (using fully dilluted ~ 17MM shares) to the bottom line with just 20% penetration. The margins go up as penetration increases and we will probably see more deals in this segment. The company's in this industry trade at 35-55 times earnings, and my calculator says .55 x 35 = $19.25. With 20% penetration of 50% of the market in what will be a SMALL SEGMENT of PILL's overall business. The bottom line is that the present, the now, is going exceedingly well for ProxyMed. The company has a fixed cost structure of about $12MM per year, and hence, will be profitable once that barrier has been broken. References have been made that indicate break even level would approximate 5MM transactions per month, or 60MM/yr. The IMS acquisition alone will contribute over 30MM claims/yr. Buy it while you can. Cheers.