I've been adding VASO around $.19. Major-customer GEHC (GE Healthcare) has been on a tear since the 1/3/23 spinout from GE, with the stock surging from $58 to $73 today. GEHC is printing new highs today after reporting 2022 results as a stand-alone company. The company gave a 2023 EPS forecast of $3.60-3.75, suggesting a forward P/E of about 20 on the shares.
GE HealthCare President and CEO Peter Arduini said, “GE HealthCare delivered strong revenue growth in the fourth quarter and full year 2022 driven by robust end market demand, improved pricing, and easing supply chain pressures. Revenue growth reflects our progress to offset delivery challenges and improve product fulfillment."
Arduini continued, "Looking ahead, we're confident that our accelerated investment in innovation, as well as standardization across platforms, will drive revenue and margin growth. We're seeing customers continue to invest along with macroeconomic tailwinds, such as increasing healthcare digitization, expanding access to care, and an aging population globally. We are well positioned to deliver on our 2023 commitments.”
VASO focuses specifically on marketing/servicing/training of GEHC diagnostic imaging equipment and it's noteworthy that in today's earnings PR GEHC cited "strong order growth in Imaging and Ultrasound" contributing to solid Q4'22 results. GEHC imaging revenues were up 18% in Q4'22 and 10% in 2022 (on an organic basis).
VASO's GEHC business (conducted through their Professional sales and service segment) accounts for all of the company's operating income, and is having a very impressive year with q1, q2, and q3 coming in at $237K, $2.75M, and $3.14M, respectively. As q4 is traditionally the company's strongest, the quarterly trends for 2022 look quite promising for a very strong q4 report in late March.
VASO shares currently trade at a P/E of less than 5. I believe the shares are quite undervalued given the company's relationship with GE Healthcare (recently extended through 2025) and strong cash flows. Cash on the balance sheet has moved from $5.8M to $15.9M to $18.7M over the last three quarters.
If the company ever wised up and jettisoned its other two money-losing units, the stock would really soar...
We make a living by what we get, we make a life by what we give.
--Winston Churchill
