Intangible Valuation
Value, contrarian, coat tail rider, idiosyncratic research

Alliance Healthcare Services: Worth At Least $10.60, Probably More

Alliance Healthcare Services (NYSE:AIQ) has a market capitalization of $75m. In 2012, it had free-cash-flow, defined simply as cash from operations less capital expenditures, of $66m. Of that, about $40m is likely to be recurring. Even if we create a more pessimistic assumption about the cash earning power of the corporation, we are still talking about cash earnings of around $20m -- or a free-cash-flow yield of 26%. Now there are reasons why the stock is so cheap, namely, its debt, the trend of revenues, and the political attitude toward healthcare costs.

If we compare Alliance's earnings and strategy to that of RadNet, it becomes apparent that Alliance is probably worth the same or more than RadNet, which...

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