FCHS
I've been buying some FCHS here and there with a little more today. After listening to the CC I had a very different take of q4 and am extremely bullish over the long run.
1) Revenue guidance of 30 million+ for 2016 is a plus.
2) Q4 earnings weren't that bad. Yes you got the 2 million litigation expense. But what people didn't see was the audit cost them like 200-300k as well. They had to take bad debt expense of over 600k for the quarter, because the auditor wanted them to take more of a reserve on the acquisition. They expect in future quarters to get some of that back based on historical standards, having said that either way that 600k+ was a one time thing. Stock based compensation was 1.5 million or so in q4 making up around 2/3 of the annual expense, they expect the expect to be more even spread out in 2016, hence assuming the same comp and average of 600k a quarter, that would add another 900k to q4 bottom line. So if you look at all these factors that should affect future quarters, I expect earnings to be in the .12-.15 range for fy 16. Hence I feel FV is around $1.5.
3) They have the leaseback sale, that will help the balance sheet and show a gain which might be another reason why it will run, having said that I ex that out, but if earnings are .03-.04 a quarter like I expect, stock should rally just on that in my opinion.
Conclusion: FCHS was one of the wierdest things it went from I plan on kicking it out of the VMIR after the earning pr, to I want to buy some after the CC, wish these issues were addressed better in the pr, and that their was a large time period between cc and PR. But I think FCHS is a value in a market that doesn't off alot of that. I plan to keep my position small, but I do like FCHS. All is just my opinion, and I could always be wrong though.
