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Strategies & Market Trends : Joe Copia's daytrades/investments and thoughts -- Ignore unavailable to you. Want to Upgrade?

To: P.E. Allen who wrote (4816)	6/8/1998 3:27:00 PM
From: Leman	Read Replies (1) \| Respond to of 25711

SURGERY AHEAD FOR ADVANCED HEALTH? Since hitting 27 3/8 in mid-October, the stock of Advanced Health (ADVH) has gone downhill, closing at 12 on June 2. Heavy short-selling of the stock--partly because of problems at rival doctor's-office-management companies such as FPA Medical Management and MedPartners--has hammered the stock. But the shorts' happy days may be numbered, say some pros. Management may break up the company to unlock the value of its two operations, say some pros. The word is that the Advanced Health Technologies unit, which sells information technology to doctors and hospitals, may be spun off to shareholders. Valued separately, the unit--expected to contribute $15 million in revenues this year and about $25 million in 1999--would command a price of 7 a share, figures Louis Riley III, who heads Riley Capital Research. ''Investors have overlooked this fast-growing and highly profitable unit,'' he says. One of its components: online software that automates prescription writing at the point of care. Riley says the medical-practice unit should turn in $120 million in revenues, up from 1997's $49.5 million. He values the unit at 27 a share, based on 11 million shares outstanding. Combining that with almost $4 a share in cash, Riley figures the stock is worth 38. Even without a spin-off, analysts see earnings of $1.05 a share this year and $1.46 in 1999, vs. 1997's 91 cents. Chairman Jon Edelson says the company will takes steps to unlock the value of its technology, which the market has failed to recognize. BY GENE G. MARCIAL