Flying high with AYSI
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MDF - The January CMS monthly report by contract indicates MDF membership as of the end of December at 3863 (Search for AdvantageCare in the unzipped excell file). Hopefully there is a significant lag in membership, but this is not an encouraging number and may be consistent with the information provided by Stanu.
Mat
Barry,
I have spoken to some who are more knowledgable than I and they indicated that if you have investors who are interested in a single portion of a company, taking that portion private can improve the ability for financing and if the agreement is written properly it can be beneficial to the common shareholders of the overall company. So, it looks like this move will only be clear if financing is found and then once we know the details. I know it isn't much, but I hope it helps.
Mat
Thirty third place,
A loser 32 times over. Second looks mighty good...
Fortunately a year is a long time, although doing the math to catch the current leader does not look promising
I also listened to the interview and it was mostly just a summary of ASPN operations. Cohan did seem to imply that for the short-term increased production trends will continue. Since the winter months are usually a time for reduced production due to no new wells and depletion of existing wells, I am hoping he means that depletion has been mimimal so far this winter. More likely he is comparing production against last winter. I still hold a small position for the long term, but barring any surprises (e.g. gold) I imagine we are in a tight trading range for the foreseeable future.
Mat
Barry,
I don't know what all of the advantages and disadvantages are, but I will look into it further.
I have sold most, but not all, so I still have a small position.
Mat
MDF - OK, I have been periodically performing a Google search on "CMS monthly enrollment" to see if I could get MDF enrollment info on the HMO on a monthly basis. I performed the check today and I believe I found the monthly enrollment as of December 1, 2006. I would appreciate it if some of you smarter than I can take a look and let me know if you think this is correct. If correct, it indicates 3,702 members for Advantage Care (line 390 of the excell spreadsheet) To look at the report use the following link (http://www.cms.hhs.gov/PrescriptionDrugCovGenIn/02_EnrollmentData.asp), select monthly report by contract, open the December excell file and look at line 390. If accurate, Advantage Care signed up 100 members/week for the first two weeks of the open period. Hopefully the month of December was even a little better. Take a look and let me know what you think.
Mat
MDF – OSFOY for RMIWA
When I first received the message for OSFOY I decided I would pick MDF (then ~$2.7), and subsequently the stock value has increased a nice amount. Admittedly I have been a shareholder of MDF (formerly MDPA) since the fall of 2003 at a share price of approximately 0.50. Since that time MDF management has led the company out of a very poor financial condition due to a failed pharmacy, improved profitability of the core PSN business with Humana, and launched an HMO to diversify the MDF cash flow and dependence on the Humana contract. I firmly believe that 2007 is the pivotal year for the MDF HMO and if breakeven is reached, I predict a share price of $4 - $5/share, representing an increase of ~40% from the current share price. Clearly at this junction MDF is not a ten-bagger candidate, however, based upon the performance over the last 3 years I have a high confidence in the potential of this stock. Below is the financial performance over the last two years (I originally had this in a table, but I don't know how to translate it into Ihub).
Calendar Year Revenue Earnings Notes
e2007 (see below) $250M .24
e2006 $230M .11 Assume the fourth quarter is comparable to the third
Q ending 9/30/06 $60.8M .05 $2.6M loss from HMO operations alone
Q ending 6/30/06 $56.8M .01 $3M loss from HMO operations alone, 3500 HMO members
Q ending 3/31/06 $54.8M .00 ($250K)
2005 $183.7M .05 HMO Launched in July05
2004 $158M .38 Deferred tax asset and benefit from taxes ~.30
2003 $143.8M .10
Positives:
Increase in number of counties for HMO
HMO open season began on 11/15/06
Ability to increase MER
Large amount of increasing cash reserves
Low penetration in counties where HMO is being marketed
Risks:
Potential to lose Humana contract and majority of current revenue and profits
Need to manage MER and improve efficiency with increasing HMO size
Typical risks with profitably managing an HMO
Estimate for 2007:
Assumptions:
The HMO reaches break-even by the end of March 2007
Relatively mild 2007 flu season
Since the first and second quarters are the least profitable, assume .03 per quarter
For the third and fourth quarters, an additional $2M should fall to the bottom line (80% of current HMO losses to be conservative) adding .04 resulting in .09 per quarter in net income.
MDF valuation at the end of 2007:
I recognize this is not a traditional valuation, and may not be valid but my estimate entering 2008 would be as follows:
PSN valuation of ~$3.2 using .08 cents/share/qtr for PSN net income (removed a penny a quarter average to reflect the less profitable flu season) and a PE of ~10
In one of the conference calls, Early indicated that a common valuation for an HMO is $10K per HMO member. Assuming 7,000 members by the end of 2007, that would add another $70M in value or $1.25/shr (assuming 55M shares)
I was glad to buy a bit of TRGD a couple weeks back at $1.10 and still holding CEDA that is now starting to move. Too bad it couldn't move sooner, I needed help in PSL. I have decided to unload a long-time favorite ASPN because I just don't see alot of potential going forward. The run-up last fall was great, but the NG supply does not look like there will be another run like that any time soon. I will probably maintain a small position since I believe the long term energy outlook is bullish.
Happy New Year to all, it has been a pretty good one for me. Hope the new year fullfills all your VMC investment dreams!
I am working on my OSFOY entry, although it is consistent with my favorite pick in the past.
OT: VMC Xmas travel adventure. Well I am hear catching up on VMC in the Boise airport. Do I live in Boise, no. Was I travelling through Boise, not originally. It all started in Spokane yesterday morning when we learned that our flight to Albuquerque was cancelled due to the closure of the Denver airport. The agent scrambled to help us with options and the best opportunity was to drive to Boise, leave this evening to Phoenix, Las Vegas, and arrive in Abq at 2 am tomorrow. Not very convenient, but much, much better than some of the people who are trapped and can't travel at all. They are all in our prayers, but I thought I would share our little adventure. Merry Christmas to all! Although I have not done well in PSL, my personal portfolio has done much better. Thanks to the sharing and entertainment provided by this forum.
Mat
Yes, the MDF run has been sweet. I am guessing we will retrace somewhat so I sold 10% this morning with the hope of buying back a bit more in a month or so. MDF is still my largest holding and even if it continues to run I will be happy. Other than having the time to do it, I have fully intended to provide some DD for MDF as my one stock for one year, but if it continues on this tear it probably ceases to be a good choice. Oh well, that is a problem I am happy to live with. Best of luck to all VMCrs in the holiday season.
Mat
MDF has broken through the $3 barrier to $3.10 on ~74K volume. Someone definitely wants a piece of the action. Hopefully this open season can propel the HMO above the breakeven point and we will be very pleased at the holidays next year.
Mat
Stanu,
Thanks for your perspective, I was not aware of the Medicare News. I don't have many shares of AOB so I plan to hang on until I see a fundamental change that indicates continued growth is not expected. I sold half before it hit $10, but I am definately happy.
Mat
MDF and AOB are having nice days. Anyone know where we would find the monthly CMS enrollment report when it is issued for November?
OT: Also, thanks to all for the TRGD.pk information. After some DD I decided to take the plunge today at $1.10 and it has been a decent first day.
Mat
SUWN, the behavior of this stock is very easy to explain. I decided to sell my holdings on .60 on November 14 LOL. I decided to take the tax loss to offset gains because I didn't think there was much potential for a big spike over the next couple of months and I planned to buy back in the new year. Shows what I know.
I take small solace in the fact that I still have SUWN in my PSL4 picks.
Thankfully not all of my investing decisions end up this way, although I did recently lighten up on MDF so it may see a small rise. The likelihood is decreased since I still hold a sizable holding of MDF.
Mat
Barry,
I am in no way an expert, but the 10Q was not encouraging. The current ratio is currently 0.5 (should be well over 1). Cash is only $92K and won't last much longer. The quarter was improved by sales of CDs ($300K) and shares of stock ($1M). A loan by one of the former owners is 2 months in arrears for interest and 5 months in principle. Sales of Intellinetx have improved a bit, but the mgmt discussion indicates it won't increase dramatically in this quarter and that Hawkeye sales are still small. The company discusses the need for additional capital to continue operations and deploy the Hawkeye. Unless sales pick up or another investor comes in to dilute shareholder equity with a cash infusion, I would say this company is in trouble. Hopefully the uptick today is related to a sales PR. I have had a limit order in at .11 for a few weeks, so I sold 60% of my stake today. I may sell the rest based upon this 10Q. I hope things work out, but there are alot of warning bells in my opinion.
Thanks,
Mat
I also read the 10Q and there wasn't much to get excited about. The increase in production of 8% was ok and there are a couple more wells to be added. The decrease in assets is a bit disturbing and I don't see ASPN going anywhere fast these days.
Mat
MDF - Very nice day and the CC was very informative. Mike Early sounded very confident and professional. I liked his ROM estimate of the $10M HMO estimate vs. $14M market value estimate. The entire CC was reminiscent of a status report on a well-planned trip that is progressing as anticipated. I can't wait to hear about progress during the open season. It would be great to hear something by the end of the year, but I expect we will have to wait for the next filing.
AOB - Glad this board convinced me to reinvest in AOB at $5. I only wish I had bought more shares.
CEDA - It is nice to see it head north for a change since I bought in.
Mat
Death,
Don't get me wrong, I am a conservative republican and I very much like what I hear from Brinker and I have been a listener for years and used On Demand the last 2 years. When he speaks of tax programs and when he has liberal guests on he sometimes appears to sympathize with their perspectives. I believe he is 100% conservative, but with a more moderate stance on social issues. I know I am gauging this on listening to his program where he is clearly careful to not show any tendencies. You may be 100% correct, and I agree with him wholeheartedly on the need for "pay as you go" policy.
Mat
Bob Brinker,
Did anyone listen to Money Talk on Saturday? Bob discussed a recent pole of Iraqis that indicated that 70% want the US to get out and view them as occupiers. A caller challenged Bob on the fact that he did not cover the entire quote of the pole. Bob did not appreciate being challenged and was furious when the caller accused him of being part of the "drive by media". It was a very interesting call and got me wondering about Mr. Brinkers political tendencies.
Clearly he is conservative, and I know he specifically avoids politically biased discussions, but as I think over the past few years of listening I would guess, stressing guess since I don't have anything concrete, he has more liberal tendencies. Does anyone have any thoughts or evidence? It is really simply a trivia question, since his financial advice in my opinion is sound regardless. Thoughts?
Thanks,
Mat
I am surprised there hasn't been more discussion of the dividend for ASPN. On the one hand, it signals that Cohen has not found an aquisition target that he believes is a good buy. I personally like that since he doesn't have something better to do with the cash, he is returning it to the shareholders. The negative side is that without growth, ASPN can only last so long without new reserves and it will be a complete NG commodity play going forward. I am still holding half my investment for the next few months, but a "perfect storm" like last year is between slim and none, and slim already left the building. Other thoughts are certainly encouraged.
Thanks,
Mat
Barry,
Haven't heard anything from the company for awhile. It would be nice to hear some sales information. Otherwise, I fear all the projections are simply that and this company will continue to flounder. I am thinking of selling a good portion to take the loss for FY06, not big but it does offset other gains, and then buy back in 07. Too quiet for my liking these days.
Mat
I have put in two dates and times, but it appears they were already taken. I will try 11/22/06 at 7:41pm
Thanks,
Mat
Death,
Thanks for the further research. It does seem to imply that question is not particularly critical if left blank. I will still probably ponder the decision, although I am leaning towards standing pat since I had no expectation for a great 10Q anyway. This open season will be critical and hopefully a year from now MDF can pass the break-even point and all shareholders will be rewarded.
Thanks,
Mat
Mike,
I read the filing that you posted and I wasn't crazy about it, but my initial thoughts were that it was probably related to accounting and the new CFO, so I was trying to be optimistic. Personally I find the failure to check yes or no to question 3 as ominous as well. MDF is my single largest holding and mgmt has earned alot of credibility with me over the last 3 years, but I will think long and hard about lightening my MDF holdings next week. Thanks for being thorough.
Mat
I just listened to CEO Cast and there were no big surprises. When asked what investors should be watching Cohan stated; Continued growth, the 20% increase in proven reserves from 2005 to 2006 and the PE ratio of 9 compared to an industry average above 15.
Mat
I attempted to update the ibox with information from recent PRs and the 10K. It is nice to see ASPN heading upwards again.
Mat
Barry,
I took a quick look and it appears to be a very good market analysis and the potential looks extremely good. The $64K question is when will sales take off and will they ever reach their potential? Based upon current prices and lack of sales news, I would guess we are at least 6-9 months from significant sales. I hope I am wrong, but we aren't there yet.
Mat
Bobwins,
I agree with you on the long term potential of MDF, but I must admit that I am disturbed by the departure of the CFO. It just doesn't make sense why he would leave at this time when there is so much potential. I know there are 100s of innocuous reasons why someone would move on, but the information I have seen on the departure didn't completely reassure me. I am still long, but I would be interested in any insights you or others have on this topic.
BTW, thanks to those who were talking about AOB when it was around $5. I bought a few hundred shares at that time and it has been a nice steady rise. Too bad my overall portfolio has been on a slow spiral downward throughout the year.
Mat
Barry,
The presentation is very professional and compelling. If they can deliver the projections, this company will be a very good investment. As I look at the latest 10Q they have ~$700K in revenue so far this year, so they are projecting over $4M more in the next 6 months. If this is true, we should receive some very good news to demonstrate they are on track in the near future. If they can hit these targets, or get close, for the rest of this fiscal year, I will be more confident on the rosy picture drawn for 2007 and 2008. It certainly provides a great thing to measure future quarters against. Thanks for finding this information and sharing.
Mat
Congrats KIK! I am particularly impressed considering how a lot of us struggled.
Mat
Skidos,
A little story that I hope is useful to you. In 1999 (I was 33 at the time) I invested in a stock (TEXN, now TFCT) that I was convinced would be my multi-bagger. I bought almost 100K shares at $.20. In early 2000 the stock went from under $1 to $5.40 by mid-March. My investment went from ~25K up to $500K with a one day jump of $1.50/shr. I was convinced it was just the beginning and could do even better although I sold ~20K shares on the way up. The stock started a slow tailspin, but I was convinced it was just a minor correction and bought more in the mid $2s. Needless to say it continued to slowly fade and after a 100:1 and 30:1 reverse split it is now worthless. Turns out the 3 product lines were mostly a not profitable and the company played games to show growth and it all happened at just the right time from an investor standpoint. I sold out a couple years ago with a small (few %) profit. Since then I try to find quality profitable companies consistent with the VMC approach Bobwins has already so eloquently described. The bottom line is to set mental targets where you will evaluate your stock and unless something verifiable (filings, extensive DD) has changed to make the valuation compelling, sell some percentage and let the rest ride. Don't get too greedy and hold out for the extra % and recognize the tide can turn at any moment, even if the company is legit. Much better to set reasonable targets and achieve the three bagger, instead of the temporary 10-bagger on paper that evaporates. I am now 40 and have managed a reasonable 16%/yr over the last 10 years and am well on my way to early retirement. Best of luck to you.
Mat
GG: Looks like the market is not impressed. I have been happy with GG since I bought WHT and I know Ian likes to aquire companies, but I was perfectly happy with GG performance and growth alone. Oh well, hopefully the combination can become a profitable powerhouse and rise to new levels, but it will be awhile I am sure.
Mat
OT: Does anyone read Money magazine? There is an article in this month's issue talking about "fundamental" index funds. Although not VMC, it is focused on companies with good fundamentals such as sales, book value, and operating income. It appears the investing "professionals" Jeremy Siegel and Robert Arnott are for with John Bogel and Burton Malkiel skeptical. The article talks about the 4.9% return of value stocks over the last 5 yrs against the -.6% for growth. It also highlights the $221B influx of invesment in value funds vs the $45B decrease in growth funds. It will be interesting to see how these "fundamental" index funds perform over the long haul. I still say the SK VMC is a diamond in the rough, but I know the masses are not ready for it yet.
Mat
Len,
Thanks for brightening my day! LOL. Fortunately I am not a speculator in real estate and over the last couple of months I have been lightening my VMC. I am thinking about an asset shift to bonds and Ginnie Maes over the next few months and information like that chart reinforce that the time is near...
Mat
I scanned the 10Q briefly and this company revenues have been stagnant with increased costs from the merger. The numbers indicate Acunetx is much more speculative and the new divisions need to start generating revenue because there is little cash to deal with any additional slow time. Also, the high amount of share dilution decreases the ability to generate measurable net income without huge growth in revenue and margins. The only encouraging thing I saw was the following statements:
Sales prospects for the balance of 2006 continue to appear strong, as we operate under a new contract with our current distributor and introduce new and refreshed products through new channels and sales partners. We also expect that
sales of our HawkEye product to the law enforcement community will begin to be reflected beginning in the third quarter this year. In early April we announced that our VNG products have been approved by the U. S. Government Services Administration to be listed on the Federal Supply Schedule, which permits access to all military and VA hospitals around the world. We plan to continue to use trade shows, print and electronic media, industry experts, and distributors to carry our message to our expanding base of customers and support organizations
Acunetx has a long way to go and I am thankful I have very little exposure to this speculative company. Hopefully at some point down the road they can post growth in sales and make this a viable investment again.
Mat
AOB - As a former shareholder and lurker, the latest results coupled with the sell-off today was too much to resist and I bought a few shares today.
Mat
Barry,
Yes, I bought ~20K in the .16 range and have been watching for good news. Hopefully some momentum is building.
Mat
What a painful day.
TVIN/MMRK: I have held both of these for quite awhile, but they were both disappointing and I think it is time to part company.
ASPN: Although the way they packaged the PR was admirable, the bottom line is the oil well is gone and I fully expect earnings will be disappointing for the last quarter so I am guessing after earnings it will drop to around $4. Obviously the weather and NG prices are a wildcard that could change everthing, but that doesn't look likely in the short term. I reduced 10% of my holdings at $4.75 a couple weeks back and I think I will ride the fall/winter with what I have.
MDF: Although I still like it long term, the discussions of the stalled HMO growth and unlikely increases until November may mean a slow decline from where we are today. Earnings of something north of 3 cents coupled measurable improvements in MER and firm announcement of additional counties could counter the slide somewhat, but the break-even point is probably at least 6 months off. This is especially true since I expect the new counties would increase costs somewhat. This looks like patience will be the key, although recognizing the risks I am seriously considering a reduction of my exposure to this stock even though I like it alot.
Needless to say, these 4 gems have darkened my performance somewhat over the last few days...LOL
MDF - Any one see the post on Yahoo that provided a link to the CMS report through July 1? Is anyone familiar with how the reporting works? MDF had reported 3500 HMO members when they reported in June, but the report indicates 3200 members. I was wondering if this could be reflective of the administrative lag behind signing people up and actually getting them on the paying Metcare Advantage roles? This is speculation on my part, but it is probably worth understanding and a lag seems reasonable. The poster speculates that they lost 300 members, but that seems very unlikely indeed unless something umpleasant has occurred. Any additional insights are welcome.
Thanks,
Mat
MDF - Well last week I decided to lighten the load a bit on MDF at $2.84, but I couldn't resist buying it back after the report by Humana. I managed to get my shares back at $2.72 including a few extra. Sometimes it pays to be lucky. I will be extremely happy to hear .03 for the quarter and somewhere near 4500 HMO members.
Mat