MorningLightMountain's Grab-Bag (fka )

[MorningLightMountain]

"""The bull case for Somanetics Corp.

CAPS All-Star pennysplants calls Somanetics: "a tiny cap health equipment company WITH CASH ... and an expanding niche. Would [Natus Medical (Nasdaq: BABY)] and [Somanetics] get together, I'd be a very happy camper. ... I think this is a very 'healthy' company... with good long term prospects."
Somanetics' key product is called "INVOS," a noninvasive system for monitoring changes in blood oxygen levels in patients at risk for restricted blood flow. While some might call Somanetics a one-trick pony, in April vanonuma referred to the company as: "the [Netflix (Nasdaq: NFLX)] of Oxygen monitoring. Not too sophisticated, one really convenient product, easy to sell and easy for hospitals to buy. Patients don't get jabbed."
stoxmri views Somanetics as a buyout target: "The company has put a floor under the stock at 15 by doubling the stock buyback pool after telling investors they paid around 15 in the open market in April. They are going to have a positive earnings surprise on June 18 when 2Q will be reported and longer term will be bought out within 3 years by one of the big players, [Medtronic (NYSE: MDT), Johnson & Johnson (NYSE: JNJ), Boston Scientific (NYSE: BSX)].
Selling for a price-to-earnings ratio of 33, you might think stoxmri's buyout hopes are a bit of a pipe dream. They're not.

Although Somanetics looks expensive from a simple GAAP perspective, its cash flow statement shows that the stock could in fact be cheap. This is because Somanetics generates significantly higher free cash flow than it reports as net earnings under GAAP. Against growth that most analysts peg at 25% per year going forward, Somanetics sells for just 19 times its free cash flow -- which to my mind, makes the stock look cheap.

Time to chime in
Of course, the aim of this column isn't just to tell you what I think about Somanetics. The Motley Fool CAPS community really wants to hear your thoughts. Click on over and tell us what you think."""

http://www.fool.com/investing/small-cap/2008/07/08/wall-streets-buy-list.aspx?terms=SMTS&vstest=search_042607_linkdefault