posted
This is a very strong buy IMO! CHMD is trading near a 52 week low. The revenues continue to increase. The book value is 7.38 per share!! They are about to merge with MIMS to form BioScrip, Inc., which would be one of the largest specialty pharmacy companies in the United States. Upon completion of the merger, each Chronimed shareholder will receive 1.025 MIM common shares for each Chronimed common share held.
The two companies are already profitable. After combining they should become more efficient and earnings and revenue should continue to grow. Also after combining the two companies the new company BioScip INC will have revenues of over $1.1 BILLION dollars. The new comany should have around 38 millon outstanding shares (CHMD has 13 million,MIMS has about 23 million, MIMS will issued about 15 million to complete the merger). Based on my DD the total assets of the new company BioScrip INC would be around $290 million with about $85 million in liabilities! Giving BioScrip INC total equity of about $205 million! With 38 million outstanding share the book value is about $5.40.
Buying 1000 shares of CHMD at $6.00 would turn into 1025 shares of the new company BioScrip INC. The average price would be around $5.85 a share. A company with about 38 million shares outstanding with revenues of over $1.1 BILLION and a book value of around $5.40 should trade at $10. Some would argue alot more!
This is my opinion and based on my DD. Any opinions would be appreciated!
[This message has been edited by osubucks30 (edited October 16, 2004).]
posted
My biggest question is the insider selling, the open market sales this year make me question the CFO and the Chair had sales. It would seem that the merger would have been talked about. I agree with you thought the finacials look good for chmd. With both companies making money, this does look to be a good stock. Like I said I just question the insider tradding this year.
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posted
Well they have increased the amount of stock CHMD shareholders will recieve in the new company. Now shareholders of CHMD will recieve 1.12 shares of the new company for every share of the old(was 1.0250). This stock is up 15% since I posted it.
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