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I received this email to day because I subscribe to the Medex newsletter.
"MEDEX would like to share the exciting news about the main office expansion in Newport Beach, to accommodate the business needs of our clients and to best serve our clients. This is to implement the industries newest technology innovations."
Actually it was first reported under subsequent events in the q ending August 30, 2014. I still think any "major" loss of revenue should be 8k-ed first.
Here is the most up-to date list of MPNs available in the State of California.
http://www.dir.ca.gov/dwc/mpn/dwc_mpn_main.html
No Amtrust.
Of course it might not be current enough and perhaps Amtrust is thinking of in-sourcing something else.
Wouldn't the loss of a major customer have to be reported in an 8k as a material event rather than having to wait for the 10q?
I notice Amtrust is still on Medex's provider portal
http://www.medexhco.com/provider-relations.html
Hoping this is much ado about nothing.
Market way under-reacting to SCKT's great earnings thus far.
Kind of a shit article.
Way underestimating the company - imo
I'd imagine it might be just for the state of California.
Nonetheless, that's still probably a lot of employees.
Great to see PFHO rapidly replacing lost business with high level and long term customers.
The salesmen hired a while back are clearly producing.
Medex newsletter indicates three new customers have been added.
Hilton Worldwide, City of Long Beach and City of San Jose.
I think a lot of new business is coming on-board.
"MEDEX is proud to announce their exciting new partnerships with three prestigious organizations; City of Long Beach, City of San Jose, and Hilton Worldwide. We look forward to a long- standing relationship with our new partners. These new portals are now live on the MEDEX Provider Relations and Employee webpages."
I am a bit confused because in your first post you said it was dodgy to even buy it.
But, 30 minutes later, you told another poster they could perhaps begin looking it if it fell to its long term support at 25 dollars.
And a few days after that you said it could fall into the teens (based on information you already had in your first post)
Kind of - but still a double.
I respect that he found it himself rather than piggybacking off other investors. (not that anyone here does that!!!)
Any links or supporting evidence (at all) other than "it is rumored" ?
"Losing big clients. On the verge of losing another one. You're down 10% from your "fair value" by the way."
Can you explain the underlined part please.
Not me today Raw. I am full-up for now.
As to "the others", unsure.
I am hoping it might be the company buying back its own shares.
That's me (among others) buying.
Welcome aboard Mike.
This is my largest position.
MTSL - further insider buying
"On May 14, 2015, Mr. Mer purchased 20,000 Ordinary Shares in the open market at the price of $2.50 per share; and on June 3, 2015, Mr. Mer purchased an additional 20,000 Ordinary Shares in the open market at the price of $3.00 per share."
http://www.sec.gov/Archives/edgar/data/1025561/000091066215000106/sc13da.htm
The guidance on the recent investor pres. was way too conservative, but I like how they are sandbagging, shows he understands the value of setting expectations low and then (hopefully) exceeding them.
The upside from acquisitions and Everlink are enormous.
Once I get my notes compiled I'll post something here.
Agreed.
It has kind of been forgotten about, making it a good time to purchase.
With any increase in revenue, the very high operating leverage and low share count are going to provide a big boost to earnings.
MTSL.
I recently set up a call with the MTSL CEO and CFO in Israel.
It wasn’t an easy call because their English wasn’t great but more importantly they were very careful and tight-lipped about future prospects, however, I did get some useful information.
Earn-outs will be capitalized on balance sheet not subtracted from EPS. Basic structure is 45% of Vexigo’s EBITDA contribution will be paid as an earn-out. If Vexigo performs above expectation, there will be an expense on the income statement. If below, it will be a “negative expense”
For better understanding this area the CEO recommended looking at the public company Matomy. I googled this and noticed one of the co-founders of Matomy is now at Vexigo https://il.linkedin.com/in/adiorzel
CEO was asked to come to MTSL. He wanted the challenge of turning around the company. Obviously feels he can with big upside to his equity position. He was the co-founder of MIND C.T.I (MNDO).
Vexigo is more technologically advanced than competitors (don’t really understand this)
Asked about expectations for Vexigo growth - said will not talk about future prospects.
Visualizr product is new and is not generating much revenue yet.
Bought Vexigo because they were looking for a high growth company in a high growth market.
Did not give q4 numbers because when they announced acquisition, q1 were the most up to date numbers and at time of first looking at it, q4 numbers were not available.
Vexigo’s preferential tax treatment has not been changed after acquisition - although this might be re-examined in the future.
NOLs from Mer-Telemanagement cannot be used by Vexigo.
No IR plans until market see Vexigo results.
A few synergies because both software companies + can merge offices in the US. Generally two separate companies.
I recently set up a call with the MTSL CEO and CFO in Israel.
It wasn’t an easy call because their English wasn’t great but more importantly they were very careful and tight-lipped about future prospects, however, I did get some useful information.
Earn-outs will be capitalized on balance sheet not subtracted from EPS. Basic structure is 45% of Vexigo’s EBITDA contribution will be paid as an earn-out. If Vexigo performs above expectation, there will be an expense on the income statement. If below, it will be a “negative expense”
For better understanding this area the CEO recommended looking at the public company Matomy. I googled this and noticed one of the co-founders of Matomy is now at Vexigo https://il.linkedin.com/in/adiorzel
CEO was asked to come to MTSL. He wanted the challenge of turning around the company. Obviously feels he can with big upside to his equity position. He was the co-founder of MIND C.T.I (MNDO).
Vexigo is more technologically advanced than competitors (don’t really understand this)
Asked about expectations for Vexigo growth - said will not talk about future prospects.
Visualizr product is new and is not generating much revenue yet.
Bought Vexigo because they were looking for a high growth company in a high growth market.
Did not give q4 numbers because when they announced acquisition, q1 were the most up to date numbers and at time of first looking at it, q4 numbers were not available.
Vexigo’s preferential tax treatment has not been changed after acquisition - although this might be re-examined in the future.
NOLs from Mer-Telemanagement cannot be used by Vexigo.
No IR plans until market see Vexigo results.
A few synergies because both software companies + can merge offices in the US. Generally two separate companies.
This is my 2nd largest position.
I think this is going to be multi-bagger.
MTSL:
Got your PM too late. I'll post notes later.
Learned very little because he was so tight-lipped and there was a language barrier.
Would not talk about anything related to the "future".
Considering they just bought the last PP, this might be a nice sign.
We'll see.
Raw,
I'm speaking to the MTSL CEO tomorrow.
If you have any questions you like me to ask, please PM them to me.
Same goes for other reading this message.
Cheers.
bbotcs, Why do you think POS won't take-off?
Because while everyone tries to be an independent thinker, we all have a bit of the lemming in us. (Though personally I passed on PESI and GV)
The market has it wrong - imo
Increasing enrollees
As of December 31, 2014 we had approximately 659,000 total enrollees. As of March 31, 2015 we had approximately 674,000 total enrollees.
Subtle wording change on UR fees prediction....
Last q - "Unless we are able to attract additional new customers in 2015, or our third-party partner requires addition overflow services, we anticipate UR revenues will be lower during 2015."
Now - "Unless we are able to attract additional new customers over the remaining months of 2015, or our third-party partner requires additional overflow services, we can give no assurance that UR revenues in 2015 will exceed the levels realized during 2014"
UR fees
Have had a roughly a 230,000 increase in UR fee excluding the UR overflow business.
Lien business is increasing
"We anticipate revenue from our lien representation services will grow moderately in future periods." If history is any guide, the phrase moderately means quite a bit.
Bought back shares
Op leverage'
Said they expect just marginal increases in GA costs.
With 3.2 million on the balance sheet, that cash is going to be used for something at some point that will benefit shareholders. Either accretive acquisitions or further and larger buybacks.
Overall, I think the expected increases in enrollees, UR review and lien business will more than offset the loss of MBR fees.
PFHO is trading around 12 times what I expect them to earn for this year. Too low for a business and CEO of this quality.
PESI EPS increases rest on treatment revenue. But this is not under the control of the company at all.
So then, attention turns to the possibility of a development stage technology. Way too much risk - imo.
The overflow margins were smaller. I asked this exact question to the CEO in the phone call I made to him some months back.
How can it be valued the same when you have just acknowledged a rather significant error in your calculations? The value should change. No?
Taking out Companion and the IR overflow, EBITDA of the base business grew 43% from 2013 to 2014. I wouldn't call that too shabby.
As an aside, a new "Lien Defense Unit Manager" has just been hired
http://myemail.constantcontact.com/MEDEX-Welcomes-New-Team-Members.html?soid=1111935066928&aid=L3jPe2v6M2M
Could you back up your opinion that PFHO will go bankrupt?
Is this based on anything in the filings...... at all?
TIA
PFHO overly conservative valuation for q1 2015
Making a number of negative assumptions
Take this q's revenue.
Subtract out 311,000 from MBR revenue customer to probably be lost.
"During the three-month period ended September 30, 2014 MBR fees generated from this customer were approximately $311,000, or 59% of MBR revenue."
therefore will = $215,341
UR revenue was 1,362,283
"During the three-month period ended September 30, 2014 revenue from these overflow services contributed $632,136, or 81%, toward the increase in UR revenues. "
so subtract this and we have $730,147 (assuming it will all eventually be lost when customer has caught up on backlog, could take several quarters, or might continue to exist at some level)
Assume no growth in the following:
HCO, - 260000
MPN - 285415
NCM, - 242,376
Other,- 76,032
So, revenue would be 1,807,025
Expenses (in 000s)
DA 13
+ Bad Debt 15
+Consulting 90 ("We expect increase in consulting fees") from 81
+Salaries 700 (might be reductions in some UR positions but phone call to CEO on Friday revealed they are hiring or have just hired two extra salesmen)
+Insurance 82
+Data 13
+G&A 133
+Outsource Fees 205
("In times when the level of MBR or UR services rendered
increases, we typically experience higher outsource service fees, and when the level of services we render decreases, we typically experience
lower outsource service fees.")
To estimate this I took fee level from when a previous 10q where UR+MBR were approximately the same as the adjusted ones above i.e. 945,000)
CEo did say the UR overflow work was lower margin than normal because of greater volume, so I am being conservative here)
Revenue 1807025 - Total Expenses 1151000
=656,025 pretax
40% tax
=393615 / 802424 shares
=Quarterly EPS 49c 8 4 =$1.96 EPS
PE 20 = $39.20
Overly Conservative Assumptions
1. UR overflow business completely disappears and announced new UR customer adds next to no revenue
2. Lien business adds next to nothing
3. HCO, MPN and NCM do not grow at all
CEO told me lien business is potentially large, but is not counting his chickens
I feel comfortable holding.
hweb,
I am trying to set up a call with management.
My questions center around treatment revenue, as this seems so pivotal to EPS increases.(with the incremental margin over 10 million being so high) Mainly wondering whether recent revenue of 12.5 million and next q are just pent-up DOE budget that is being spent and then we go back down next year. Or there has there truly been a sea-change in DOE attitude??
I don't understand their cost structure on the services side as to whether it has good Op Lev' or whether it will be permanently a low margin business. Not interested in their new technology because I invest based on nows rather than maybes (JBII taught them that)
I also have doubts about management's ability, but a good sustainable EPS rise will be enough for me. I just can't get a read on whether it spikes for two quarters and then drops. If treatment revenue dops down, we swing back to pretty dramatic losses and the services side won't make up for it.
The lack of market reaction might suggest skepticism, or is truly misunderstood/undiscovered?
Please email me any questions you would like me to ask them.
sbsji at yahoo.com
Hweb,
New to PESI but starting to research. Thanks for bringing it up.
Interested in your views on this.
I can see it is really cheap now, but am wondering further out. Perhaps the market will heavily discount earnings if there is any danger of discretionary spend from the DOE dropping next year or the one after
1. How much of current revenue is not related to DOE budgets each year?
2. Has the company given any indication as to what the DOE budget is likely to be for 2015?
3. What is the typical lag on revenue timing after a contract has been announced?
TIA
Hi SouthAcresDave,
Yes, I am also from MCC. I would really appreciate your report.
sbsji at yahoo.com
TIA
Thanks, I've read them, and actually did a write up on Microcap club for SPCB. But I still can't get comfortable with their contract breakout for some reason. The interpretation has a big bearing on valuation.
I am just trying to wrap my head around what the hell you are talking about it.
Any chance of explaining it in a different way. I'm a bit slow.
researcher59,
Have you read the short thesis on SPCB on SA?
http://seekingalpha.com/article/2608465-supercom-overvalued-by-almost-60-percent?v=1415055118
What do you make of it?
Personally, I am still confused on their contract structure and definitions of recurring and repeat business.
Some time back you said there would be toxic financing and/or bankruptcy for SPIN when it was in the 25c range.
SPIN is now 65c.
That's a huge loss if one was, hypothetically, short this stock
Just wondering, How did you get it so wrong???????
Disclosure: No position at this point but watching
Hi Garp,
So that was you today. I have noticed nice amounts on the offer from 34c to 34.5c. Good to see there is some liquidity.
One point, in case you are wondering, the one-controlling interest listed at the bottom of the income statement is Biotech. Remedent has entered into an implant business with them, so Biotech take a cut of those profits.
Investor presentation here.