By Another Name, A Sweeter Stock?By
On Nov. 6, DVI Financial will change its name to DVI Health Care Services. Who cares? Investors who have put big bucks into the tiny, little-known Irvine (Calif.) company, that's who. They include the Pritzker family of Chicago, with a 40% stake, and management, which has 20% of the shares. These investors think the name change will call attention to DVI's new focus--and help double the stock price in the next 12 months from its current 8.
DVI's initial business was financing and leasing diagnostic and therapeutic medical equipment to physicians and hospitals. But Congress enacted a law this year barring physicians or hospitals from referring patients to any clinic or health care centers in which they own a stake of more than 40%. Since then, cash-rich DVI has been busy buying 60% stakes in these centers.
Analysts say some 1,000 outpatient health centers are owned by either doctors or hospitals. By next year, DVI expects to have acquired a 60% stake in at least 20. Already, 80% of DVI's new business is from health care.
"That's where the sizzle is," says one investor, who thinks DVI will earn 75~ to 85~ a share in 1992. (It earned 37~ in the year that ended June 30.) As DVI matures and more clinics are added, earnings could hit $1.20 in 1993 and $2.50 in 1994, says this investor.
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