FONR
I have been buying FONR all week sub $19. here is what I like.
1) They earned .63 in q2 which is an outstanding number for a healthcare stock. Granted there was a tax benefit, earnings would of been .58 with that, which is what I would use still for a healthcare stock like fonr, that is a stock that should trade in the mid 20's to around $30 as FV in my opinion.
2) The concern on FONR has been with this Allowance thing and bad debt thing. I'm gonna tell you after extensive DD this past weekend, I don't think there was a gain in q1 or q2 from that. So I think we are looking at a real number. Now you say why do I think that.
Look at the 10q line item for the most recent quarter.
It say provision for bad debts and bad debt expense for patient fee
Now look at the same 10q for this time last year.
One line item says provision for bad debts, and the other say provision for bad debt expense for patient fee.
The simple answer is they combined these line item in this FY which makes sense because I always believed that should be one line item not two. If you need further convincing, notice how that expense is up significantly y/y that is because they combined both line items. There is nothing go on here other then they turned a two line item presentation in my opinion to a one line item presentation which by the way makes sense in my opinion.
Conclusion: I think FONR is very attractive in the 18's, I see the stock as significantly undervalued here as I feel FV is probably in the upper 20's. All is just my opinion, and I could always be wrong though.
