Thanks!

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Adam,

The valuation method assumes that you are buying a good business and that you would skip the above business altogether.

The equity is added as a “terminal value” instead of projecting cash flows out to infinity, and assumes that the equity would grow at a satisfactory rate over time.

If the business has bad economics, the F Wall Street method of buying good businesses at cheap prices won’t work.

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If you don’t have the CRB Commodities Index book and software (issued each year for a few hundred bucks), your best friend will likely be Google.

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Yes! Here you go!

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i have the same problem, glad to hear i’m not alone

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Hi there,

For the spreadsheet there’s a quick and dirty fix until Joe’s guys get to it.

Run the spreadsheet, let it fail into the debugger, you’ll see things like .ThemeColor = xlThemeColorLight1 pop up in the excel VB debug. Place an ‘ at the begining of the line (VB line comment) and hit the play button; You’re OK doing this as all lines of code that give a bug are for formatting. You’ll need to do this about 20 times to get through them all but you can save the spreadsheet afterwards as your ref.

Finally, you’ll have the data in the spreadsheet, and you’ll see that the average if function doesn’t work for the growth rates on the main page. Basically, it’s just saying take an average of the values of the appropriate line if the values aren’t zero. In any event, you’re better off checking these averages by eye as anomalouse years can “pump up” your averages and give very missleading results.

Other than that, nice Job Joe, I’ve been getting some very consistent market prices with it (whilst not cheating), and it has thrown up some interesting price anomolies that could be profitable.

I’d be interested to know if you can get it to tap foreign share data as well, I have interests in none US markets and it’s all very labour intensive at present.

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Hi,

To fix the average issue, use the below:

Range(“B27″).FormulaR1C1 = “=AVERAGE(R24C2:R24C11)”

Range(“B28″).FormulaR1C1 = “=AVERAGE(R14C2:R14C11)”

Range(“B29″).FormulaR1C1 = “=AVERAGE(R16C2:R16C11)”

Range(“B30″).FormulaR1C1 = “=AVERAGE(R18C2:R18C11)”

Range(“B31″).FormulaR1C1 = “=AVERAGE(R19C2:R19C11)”

The program incorrectly uses the AVERAGEIF function. In fact Excel does not have a AVERAGEIF function. The function should be AVERAGE.

Add ‘ to the line containing AVERAGEIF.

Thanks for the spreadsheet Joe. Great stuff in this site…….

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Hi, thanks for the fix. I tried commenting out the code and modifying the average formula. Now it seems to be working without any errors. But I am having some other issues. On the ‘Summary’ tab the data is only for the year 2000. It seems to be populating every field with data for the year 2000 even though the formula asks it specifically to retrieve data from other years.

e.g

even though the cell C3 in the summary tab uses the expression

=’Balance Sheet’!C2

the cell is populated by the value ‘2000′ even though the cell C2 in the balance sheet tab is populated by the number’2001′

I am not sure what’s wrong. Does anyone have a clue?

Otherwise looks like a great spreadsheet.

Thanks Joe.

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As I mentioned earlier that I was having issues with the summary page.

Here is the screen shot of the FWS Analyzer Summary page. You may need to zoom in to see the image clearly.

http://www.flickr.com/pho…@N04/?saved=1

Thanks

Ranajit

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No. Though it’s found in Cash and Cash Equivalents Marketable Securities, excess cash is the extra cash on hand that the business doesn’t need to fund its operations. It’s kind of like extra savings.

Think of it in your personal finances. If you make $500 more each month than you spend, you can build up a savings account. After a few months, you have a few thousand dollars in there. Now, assuming you don’t need to pay off credit cards or have any big expenses coming up (eg., a wedding, home purchase), that few thousand dollars is “excess cash” to you.

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Hi there Adam,

I was at a loose end and decided to take a look at your quoted stock AMS. What strikes me is the year on year drop in profits.

From an equity stand point it seems to be undervalued, but there is a fair bit of debt for a small fry like this, and looking at free cashflow at around $3 million, and debt costs of arounf $7 million, a further decline in earnings could make the pips squeek there.

I’m not a big follower on gamma knife technology, so I’d have to understand, the size of the market, their current penetration into that market, and where it’s going. Also what are the competative techniques, the knife I’m assuming.

If this is a disruptive technology, I’d have to then understand the pricing power power behind it, can they drive growth through pricing in the the limited market of brain tumour sufferers, what is the limit medical insurers will pay for this kind of proceedure? That info along with potential market size might give you some idea of growth potential.

All that makes too many I don’t knows or flat nos for me to look at it any further.

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I think the key thing you noted here Joe was as follows:

“their current penetration into that market

Penetration is key. When it comes to tech companies, how well they can demonstrate penetration into a relatively new technology is really key. You want a CEO with some balls. The Bigger the Better.

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Hey Adam if your interested in a forum over at oldschoolvalue.com is a great place for value investors to discuss about stocks. People over there know about fwallstreet and the methods etc. especially the owner. Check it out

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As peridotic mentioned, Jae has a forum and a lot of great articles. Check him out. Would people here actually use a forum if I implemented one? I looked at it a while back, but there wasn’t a ton of interest.

If enough people want it, I’ll have them set it up.

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Hi Adam,

You’re right on the above figures, I took a quick glance at google finance financial statements for AMS (the numbers that popped into my head are nothing like those on morningstar).

That said, for me it’s too much of a once trick pony with a half trick being dependant on the FDA (proton knife). As a personal principle I wouldn’t go for small medical or biotech like this as the have the habit of being snapped up by the big fish for pocket change when they have a bad quarter.

From a business perspective, I just don’t like the fact that the majority of free cashflow is from Depreciation and amortisation, and that proportion is getting bigger year on year. This suggests that they don’t currently have an economic moat to speak of. This is fine if we’re talking about a net net assets play and we’re buying the thing for less than the value of the quick assets. I’ve still no idea about the size of the market or how many brain tumours are operated on a year, that’s a key one.

In summary, if it’s 40% discounted based on cash flow but has 50% or greater chance of not pulling off FDA approval for proton beam techniques, or increasing market penetration for gamma knife I personally wouldn’t give it much more attention, unless if made the net net asset play category.

I may keep an eye on it though as things can get very good for small companies like this, very quickly, without the market price moving. At that stage, I’ll be into the reports to see if I can make some money.

Good luck with it if you decide to buy it I have less exciting but surer plays on the go at the moment.

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