AMN: Panic-driven Opportunities

AMN has seen its stock price drop from $120 to only $45 since late September. The company had $17.25 per share in cash on its prestine balance sheet as of last quarter, which represents nearly 40% of today's price. Backing out that 40%, the market is now valuing AMN at only 4.35 times next year's estimates, which were already revised downwards by 25% from a month ago's estimates. Given the company's position in the chemical, energy, and infrastructure industries, with plants throughout the world, AMN is situated to benefit greatly from future economic growth, and considering the rock-bottom valuations on AMN's recently revised estimates, it appears as though AMN may be ready for a recovery. Aside from this, AMN has support from going substantially lower as it is now trading at only 0.85 times last quarter's book value, and given the lack of intangible assets, this represents real value. Some investors have stated concerns over sales by management and directors, however, there are two strong arguments against this. First, these sales were in the $90 to $120 range, which represents at least a 100% premium to today's price. Second, there have been recent purchases by insiders at the $50 to $70 level. It's obvious the insiders knew what they were doing when they sold at the $120 level, so one cannot ignore recent purchases. Overall, the company is in prestine financial position and is situated in strong industries that will continue to benefit, especially when the economy begins to recover, and the current valuations represent a very negative outlook for the company going forward despite all of this. Now appears to be time to take advantage of the market's panic, and AMN is one of the many great ways to do it.