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fonar value play
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[QUOTE]Originally posted by raybond: [QB] posted by lasstorkehave Markets has been up the last year. Investors love good news and growth. A lot of companies have potential. Fonar's acquisition of HDM is completed. Fonar.has had no significant news the last 2 years and has no sign of growth. The company's 9% increase in scans in 2015 has been offset by obamacare etc. My advice to investors: "Don't despair" Fonar's fundamentals are great. - Diluted EPS the last 4 quarters of $1.75 - Book value of $5.29. Add 3 years EPS and book value is in the range of $10-$11 in 2018 - P/E of 6.1 ~ return on invested capital is above 16% - Profit margin the last 4 quarters is 19.9 - The debt on the HDM acquisition of $20M + $5M has in 2 years been reduced by $16M to $9M - Fonar's ownership of Imperial is in May 2015 increased by 5% to 96%. 4% is to be purchased in May 2016 - The January 2015 20% Class A acquisition is going to increase net income by 20% of $2.4M or ~ $0.5M - The May 2015 5% Imperial acquisition is going to increase net income by 5% of $6M or ~ $0.3M - The above acquisitions in 2015 increase 2015 diluted EPS by $0.13 compared to 2014 EPS ($0.8M/6.4M) - Positive cash-flow. The 2015 acquisitions is going to reduce dividends to minority interests in 2015 by $1M Fonar's potential is great - Fonar is a M&A target. Reasons: Fonar's patents, profit margin and cash-flow - Future diseases could be identified by Fonar's MRI scans - Fonar might buy another part of the 80% Class A ownership in HDM - Fonar has huge potential in export of MRI machines. - In 3 years Fonar has no debts. Cash-flow from operating activities of $12.5M reduced by investing activities of $0.5M provide enough cash-flow to pay dividend of $2 per share - A new president might cancel obamacare etc. Unless terrible news occur an investment in Fonar at $10-$11 has to be compared to a book value in 3 years of $10-$11. I'm convinced my investment in Fonar has reduced downside and signifcant upside. My target on Fonar is $25. My target at a buyout is $40 ~ P/E of 23. [/QB][/QUOTE]
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