The Lorien contract is certainly a good start. The actual amount SVA will receive I think will be quite low. The interesting feature about Lorien was that it was already a Medline customer.
Broker figures are rarely correct. They do sometimes have access to additional data and are prepared to talk to the researched company's partners in order to get a clearer picture of the potential. Edison's DCF valuation of $107m gives a share price of ~$1.46. There must be some very good numbers down the track a bit. They need to expand their spreadsheet in the report to cover another 5 or so years.
Edison also used a A$1.08 : US$1 whereas it is now A$1.15 to the US$ and (apparently) with further to fall.
My holding in SVA is quite low at 1.8% of my share investment account. It is not on the MLC list of allowed shares for my super. I am comfortable with this level of exposure and prepared to let it sit. There is always the possibility of a takeover from Medline.
I have 2 other companies in similar situations - NAN and IPD. Both are a bit more advanced and with enough cash to keep them happy.
The SVA 1st Qtr report will be interesting and if excellent, I will certainly add to my holding. But I think it will probably take until the 2nd Qtr before we can get some idea of the potential of SVA.
SVA Price at posting:
54.0¢ Sentiment: Buy Disclosure: Held
