Morgan Keegan Raising Estimates On Alliance HealthCare Services (AIQ)

Morgan Keegan is impressed with Alliance HealthCare Services AIQ after the company reported strong second quarter results yesterday. Morgan Keegan rates the shares as Outperform. In the report, Morgan Keegan writes, "We are raising our 2010 adjusted EBITDA estimate from $163 million $167 million, compared to guidance of $155-$180 million. We are raising our 2011 estimate from $180 million to $185 million. We believe these are conservative estimates." "We believe that Alliance HealthCare can counter the decline in its mobile MRI business through investments in mobile PET, fixed-site operations, and radiation therapy, all of which offer strong growth potential. We expect the company to generate strong long term internal growth, augmented by accretive acquisitions, as it benefits from industry consolidation, though its near-term prospects are hampered by the economy. Its cash balance and strong cash flow position it as a capital partner for cash-strapped hospitals. We recommend purchase." Shares of Alliance HealthCare closed at $3.62 yesterday.