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ghmm... Really good question. We have been discussing about that particular topic for a long time (more than a year) about 5-6 years ago (as MDF financials was very shaky back then) and then we stopped talking about it because seems that it seems to be win win situation for Humana to subcontract their patient care to MDF (and then 6 years later, HUM and MDF relationship seems to be just fine, so maybe the risk is not too high, but it's out there.. it's possible that Humana and MDF break of their relationship). and if that is the case, then MDF will be very crippled (I would guess they will cease their business altogether, as their retail , non-humana related is peobably only less than 20% of their total business, if I remember the number correctly. at one point 92% of their business was Humana). Because of that reason I think MDF tried to open/be their HMO business and recently they sold it to Humana after a couple years of losses on the HMO division (i.e. it's not easy to operate/build HMO business, and MDF expertise is apparently PSN)
What more likely to happen IMO (if the current relationship have to change drastically towards the worse for MDF) to MDF is HUM will buy MDF at a depressed price (with the threat of leaving MDF altogether if MDF doesn't accept the bid).
It's not easy to open a PSN service in the MDF established area (of similar network coverage) for HUM to switch to.
And again I think it is a win win situation for HUM and MDF right now, so I don't think HUM will risk, just to squeeze a bit more profit.
and if you see MDF is a low margin business. high sales and low bottom line profit, while HUM is higher margin (they take their cut and let MDF carry the risk).
And in some ways I think HUM will be better off if MDF is doing well. If MDF is about to go under, HUM will get a headache on figuring out where will I move their patient (Medicare members), and taking them into HUM network (and possibly have to open or subcontract other PSN in the area could probably a headache for them and their members).
This is all just my opinion.
Stan
Hi Kuwl,
I'm long on this stock and has been for a long time. ups and downs for the last couple years with the HMO story then the HMO is sold, and now going solo on PSN and then the patient care model.
Price targets is hard for the short term (i.e. most of my target for this stock has been wrong most of the time), but I do feel at this price (under $2), it is a very good deal. and as you know the company has been buying back stock at this level as well $1.8-1.9 average. I'm also periodically adding at these level (for the long haul).
Just for discussion sake, trying to put a target on thsi stock. If we put a PE of 10 on trailing 12 months, then you get $2.7 which is in line with what yaho finance analyst 12 month target shows (and if you want to add back the cash that the company have which is about 80 cents per share then you get $3.5 target, as the company has low/almost no significant debt)
Growth might be limited and margin might be pressured (and also some concern with the regulation from the government) but I like this business (and should still be in demand in the future)
I also like CNU (which is MDF competitor, also in florida. it's more expensive from valuation standpoint which makes me like MDF more, but I thought it helps me diversify on my healthcare holdings)
what is your take on this stock?
Stan
Is the market getting ahead of itself..?
I'm 40% gain (as of last week but I'm sure I will be on the 30s by the end of this week) on the PSL and yet that is only good enough for 23 spot...
anyone holding more than 50% cash in their portfolio as of today?
when do you expect to go back in?
Q3 CC Q&A
Q: where the membership increase in Q3 come from
A: special needs plan (dual eligible), also through Humana sales effort. but hard to say whether it will continue to increase the rest of the year, as usually during this time, membershp actually dropped.
Q: tax lower than previous quarter, why?
A: some tax free interest income in investment
Q: patient center medical home concept. what is the long term payback? will lower the medical cost in the future?
A: this concept driven by large employer (e.g. IBM) to return the primary care practice to be the principal care for the patient, and to improve/bring technology to the primary care. there is incremental cost to put this model (investing in EMR, hope to get reimbursed by govt but bottom line if we don't think this will improve the quality of care in the long term, we won't do it).
Q: weighted average OS for Q309?
A: diluted 45.5M Q309. 53M for Q308. 87,000 more shares bought recently (in Q3)
Q: patient center model. will it bring medicare patient in too?
A: we believe the senior/medicare patient is key population but the patient care will serveice broader range of people which will bring stability (diversified?). could bring much larger population (govt sector healthcare), includig the non medicare population.
Q: what % of total doctors are in your practices (vs contracts). do you find it hard to find new doctors?
A: about 26-27% of the doctors are in our own practices. we're not interested to buy practice just for the practice and install new doctors (many has agreed to stay for some time to give us time to transition). it's definitely a challenge to attract doctors, and the patient care model help in our recruitment effort.
Q: patient mix in your own doctor, will you also get revenue from the fee for service
A: yes, we do
Q: 2010 outlook. reduction in benefit in medicare advantage. in open enrollment process, do you actually see the benefit reduction?
A: yes. and the plan is available to public as oct (15?). most of 2010 benefit is decreased. should also impact/ofset the reduced in premium
my additional comment on CC and q3 result and 2010 plan:
1. Overall good result, but more importantly they are continue to set for the long run (not looking for quick gain but setting for the continuity of the business, and I like that). Having said that they will continue to try to improve shareholder value and their business by looking at acquisition opportunity (if there is an opportunity)
2. They are updating their old (paper based) system to a computerized documentation system which should help efficiency in the long run (needs money to invest for this system but it will be good for the long term)
Great job Mike Earley on leading MDF (and setting MDF for long term success as it will navigate through the big changes in the regulation, benefit/premium cuts, post-HMO sale, and diversifying the business with the patient center care model)!
Disclosure: I own MDF shares.
thanks for the info postcog..
I'm betting on the healthcare industry as well (HMO, PSN, etc)
Q3 result meet expectation (5.5 cents).
CNU came up with their result this morning as well and they seem to grow faster (both revenue and earning and cash flow increase as well).
I am aware however that CNU has been having one or two big acquisition that speed up the revenue and income increase (and they incur a lot of goodwill from those acquisition, but EPS increases nicely at CNU)
We'll see if MDF will use some of their cash to improve EPS (buy back more shares at these level). I'm buying as well at these level ($2-$2.1)
Q2 and Q3 supposed to be their best quarter and it is just ok. I hope Q4 won't be bad.
thanks weeble. to be $10 , I think they need to get their revenue 3 times or 4 times the current rate. I don't think this company will get like forward 20-30 PE. I see the last quarter EPS * 4 would be like 12-15 max.. but that still give you $5+...
to go to $10, we're talking about $100M market cap here. and that's if they don't dilute anymore.. it's enouraging however to see that none of the insider is selling. as they must be expecting more in the future.
a lot of healthcare company that has about $100-$200M market cap and has more than 10-20 times of ASRG current revenue
also the fast increase can be contributed to the very low float IMO (1M shares)
but I sold it just because I want to see more news that they will grow 3-4 times the current size while maintaining the same profit margin as last quarter
but if they can really grow that much, surely the stock will be $10+
no kidding...
no wonder I get confused a lot..
sometime I wonder why it took forever to execute when I try to buy at the ask or sell at the bid... (as the real ask might be higher or real bid might be lower than what I put)
thanks for the info..
I sold my asrg today for almost triple. I figure out I just need to take the profit for now (I wasn't good at taking profit in the past and ended up riding all the way down). what I'm confused is when I submit the sell order the bid was and is still 2.85 but my shares was bought at 2.91.. why would anyone pay more than the bid price.
not that I'm not happy with the extra money but just wondering why would that happen.
anyone knows..
thanks.
the other reason that I'm selling is that I'm not sure if they can maintain their high profit margin as they get bigger (seems like too high that it might attract other company/new company to enter their market).. jmho..
also this stock gone up from 2 cents to 3 dollar.. anyone here bought it at 2 cents or even under 10 cents?
Mike,
What is the reason for you to sell GENX?
THanks,
Stan
Digi, I've sent you some emails and waiting for your reply
TIA
Stan
what is the result of the email to GENX?
how can they not care to shareholder. to me that means breaking the law. having a company public means they have fiduciary duty to maximize sareholder value including providing timely and accurate update/filing of their financial reports...
but to be fair, they are in Pink Sheet. so if I lost all my money on this one, it's my fault.
Digi, any info on GENX? do you still in touch with them? Do you still own GENX shares?
I'm contemplating to sell and book the 90% loss on this one.
Seems like a fraud to me.. (though they never say they are commited to catch up with their filings)
Any thoughts? much appreciated.
congrats Mike..
I picked up some at $1.2..
should not have frozen CSGH.. argh.. couda wouda shouda...
but I froze it at 26% gain so can't complain much , except it went up another 20-30% after I froze it...
first time I want to be conservative.. i guess this tells me that it is so hard to time the market..
I see.. I'm not sure where it will go from here.. I don't think it will go up much further.. I think it will probably stay or actually go down from here since revenue is shrinking and the fact that they keep paying fat dividend (I know this is kind of non-intuitive, but they pay high dividend now but later they migh tnot be able to pay this much and also they are paying out most of what they earn signalling that they have no other better use of cash for growth for example. just my opinion)
I'm actually thinking several times to sell (and just book the profit) but I'm still in, as the dividend is very tempting.
I got in most of my shares at $6-$7 range more than a year ago, and have been getting dividend for more than $2 per share since then.. in fact , this is one of my best performer this past 12 months (including the dividend return)..
Thanks,
Stan
TycoonSoon, I'm still in..
what part of the news that you like today?
What do you think the long term prospect for USMO (like 3-4 years down the road)?
I'm asking this information above because I'm a long term investor (not looking just for a quick trade)
thanks SSk for the reply.. I'm good now...
NSOM Challenge (my first time entering this. Thanks NSOM for the PM and your effort to encourage me to enter the NSOM challenge)
My theme is all healthcare. I'm thinking they have taken a beating due to the fear of Obama going to nationalize healthcare and make the universal healthcare plan which might reduce profit for the healthcare companies/sector
And also the fear that the medicare and medicaid program are underfunded and will run out of funds in the future.
While I don't know for sure if that will all be true (that profit will dissapear), I'm banking on consolidation on the healthcare industry , therefore I pick the smaller companies among the healthcare (not drug companies btw), vs the big ones like Humana, Anthem, Wellpoint etc
So here's my pick (mostly have decent PE ratio or about 10 or under. and supposedly for long term pick, and maybe some of these company might get bought out at a premium in the next 2 years, except SUNH and MOH.):
WCG - Medicare and Medicaid
CNC - Medicaid Manage Care
HS - Medicare HMO
SUNH - Nursing center, assisted living, mental health center
ODSY - Hospital, medicare
MOH - Medicaid, fee for service (for low income families)
Thanks,
Stan
PostCog,
Thanks for the message. Yeah I've been holding and continually adding this stock for a very long time. It's one of my favorite small cap healthcare stock.
I don't know how the nationalization will impact MDF but I personally think the Govt will not create a system where MDF will die (unless they bring it to themselves by having bad management and bad operation), because it is a very critical segment.
why not moderate this board?
It seems that one need to post often in this board to stay as moderator. and this board is pretty much dead so I don't see a point trying to keep adding myself as moderator everytime the system kick me out of it due to lack of activity of the board (and lack of my posting volume in this board).
So what stocks do you like these days?
Are you buying anything recently?
Stan
DigiTech, thanks for the PM.
As GENX shareholder, I really appreciate you helping GENX in any way you can. However, as a fellow investor, I would like to say that you should be careful with them (and surely not to invest any more dollar unless you are sure that tehy can be trusted and if they turned out to be a frau, you are ok to lose your money)
To me, their explanation doesn't really make sense. I file my own SEC filing. It is not that complicated. If they really get duped by one PR firm, they can try to hire another one (ask for referral or do a background check before signiing up/paying the PR firm). Worse case they should be able to file their own SEEC filing.
I'm not selling my GENX shares but will definitely not add anymore, until they can get audited properly, show profitable and growing or stable business and that there are interest from any institution/hedge fund that hopefully they will do some/proper due diligence.
Thanks again for the info DigiTech. Please keep me posted.
JMHO,
Stan
PS: my other suggestion and question for them:
1. What is their intention having listed in USA stock excange?
2. Why bother listing in the Pink Sheet? can they afford to take the company private. as I see no point to be listed in pink sheet, unless they want to sell a lot of stocks and dilute the company (just like NMKT for example)
3. Create a website (i.e. talk to shareholder)
4. Have conference call/annual shareholder meeting and take live questions.
5. and yes I like your suggestion about the external member for the board of director (and I lik the rest of your suggestions as well)
6. if they don't care with shareholder, is that mean they didn't care with themselves too (aren't they shareholder as well. what is the insider ownership.).
nsom, thanks for the PM and the detail explanation. I was about to say, wow .. that is a quick reply..
and it will take me some time to digest it too..
Thanks again. I'll let you know if I have any question tomorrow.
Stan
Thanks for the reminder Len.. I'll be around... (regardless whether you guys like it or not ;) )
Stan
Thanks Len for the response and explanation. I didn't know that IHUB has been sold to some other company. In that case, then it is probably just fine. I thought Matt owned this business as the article mentioned that Matt is the owner and/or founder of IHUB, and I thought as owner he will know everything. It might seem paranoid but for those people who have their credit card been lost/stolen/fraud and/or their identity has been stolen, they might agree that it is a nightmare (that never seem to end). It's not about the $50.. $50 is nothing compare to the hassle that we have to potentially deal with.. (and it takes a while before they approve that your account is really due to fraud, and sometime they require you to pay the amount first when it is due before later on will credit back the account after the dispute process is completed. again each issuer have different rules on this)
And what I meant by canceling the CC, I meant to say just report your card as being lost/stolen (or even mention to the issuer that there could be potential fraud) and they will reissue the card with a new number (and I didn't mean to say closing the credit card). it might be a bit pain if you have registered that old card number to many site where you then have to re register the new card number but I guess if it means peace of mind, maybe it is worth it. Thanks everyone (Vic, bbotcs, etc) who help explains my statement.
just like an insurance. we often feel that it's a waste of money especially if you never "use" them (I've paid cars insurance for more than 10 years and never make a single claim), but if we have an accident (or get sick) without any insurance, then we will feel bad and then wonder why we didn't have insurance at the first place. Knock on wood though, I'm very happy that I never have the need to use my car insurance even though I've been paying a lot of money all these years.
The other reason why I said about canceling the card is that because I have a personal philosophy that I don't do business with a criminal (a convicted criminal). At least as soon as I find out I try to stop the business relationship, in a way similar to companies that immediately cut ties with employees that are indicted by the SEC/Law enforcement. And again I didn't know that Matt did not own this business anymore, and by making this statement, I also wasn't implying that he's a criminal, until he is proven otherwise in the court of law.
Stan
nsom, thanks for reminding what PSL is for (for you). and I also agree with you (as idea lab). for a second I forgot right there. though I don't use it as much as I used to when I still like to buy otcbb stocks. I have decided I'm not buying otcbb stocks anymore (whatever I still have left I will keep where I see fit but not buying anymore). I'm at a point where I don't need to chase crazy gains anymore. I have to admit that otcbb stocks are quite fun as it can moves like crazy but after losing a lot of money (and mainly due to fraud of the otcbb companies and not business failure, for example etlt and cxti, I decided enough is enough. and it's quite pain to see hard earned money disappear through fraud)
btw, I'll take a look at nsomniyak challenge...
so why is the PSL participation rate continue to drop...
Stan
I agree with Len. There are good people and bad people everywhere, and in VMC, we discouraged pumping/pumpers. Pumpers are a big turn-off.. and most of us can smell pumpers/pumping activity from a mile away anyway.. and on any case, we all should take whatever we read in the internet with a grain of salt (even the PR from a company)
that would be gambling, as you predicted, which is illegal.
would be fun though...
that's what I was worried about when I posted I hope there will be enough people participating.
when I posted my pick 2 weeks ago and also one week ago, I saw pretty much no post in this board (meaning probabaly I'm the only one submitting picks that time)
anyway, the market has been tough (down in average in the last 3-4 PSL), and I guess people are just tired in this market.
Also I wonder if the gap between each PSL discourage some people too (I did get discouraged a bit as many of my stock picks have their earning released during psl downtime and missed the run, but I am not complaining on the increase on my real portfolio though :) ). maybe we can have the PSL run longer until the earning deadline passed, or have the next PSL start again as soon as the previous one completed (have people pick the PSL picks before the previous one completed and start again on the next day after the previous PSL expire)
I know that this will make Len and SSK even busier.
jmho
Stan
why would he do that? Doesn't he already make enough money by running this site. It doesn't makes sense to me that he would do something like that and jeopardize everything that he has successfully work on. I hope he is innocent and cleared of all charges. But either way, I hope everyone who read that news understand that it is just not worth it. Regardless you get caught or not, it's just not worth it. JMHO.
Stan
PS: I probably would recommend people to cancel their credit card registered with this site if these people are proven guilty. Just to be on the safe side. You'll never know what other things they might do.
I hope there will be a lot of people entering the PSL 12
MDF posted record earning today.. 9 cents..
and buyback seems to continue..
long and strong..
Stan
Reposting Digi explanation of the visit:
If this stock turns out to be a scam stock too, it tells me that even visiting and seeing the operation directly means squat, which is sad.
they said they will file their SEC filing and move to .OB from .PK but I haven't seen that happening yet.
Anyone dare to add at these levels...?
================
Report on GENX's visit. (VMC repost)
On the 17th I flew from Korea to Tianjin. Tianjin is a very large city of 14 M located next to Beijing. They will have several events of the Olympics in that city. Many biotech companies are located in Tianjin.
At the airport I was met by 2 young ladies from the Golden Group. One of them was the assistant to Mr. Song the Chairman of GG and owner of 72% of GENX shares. The Golden Group is a conglomerate of several companies owned by Mr. Song and his son. Total workforce is 1500.
After lunch we went to visit the new GENX factory. I was met there by the GM, the Golden Group, the operation manager and the CFO of GENX. Unfortunately I do not have any photos since my camera was stolen the following week. The building is very large. I estimated around 300,000 sq ft with room to expand. It is located in an economic zone of Tianjin with many foreign companies. The shell of the building is completed and I counted around 50 to 75 workers on a Saturday!
I was a bit chocked at the size of the building. 50% of the building will be for GENX. The outside will be completed in 3 month with production starting in Q4. Full production will be possible in Q1 2008. When I asked what production level they expected I really taken aback. They expect to be able to increase production from 5 times 10 times the present production. They also expect that the production cost will be tremendously reduced due to the volume and new equipment. My immediate question was: “Can you sale the increased production?” the answer: “absolutely yes”
My internal calculator went to work right away:
$700K (Q run rate) X by 5 X by 4Q = $11.2 M revenue
$ 0.01 (Q profit per share) X by 5 X by 4 Q = $ 0.20 per share
I kept it as a straight line and did not include cost reduction just to be conservative.
Not bad for a 12 to 15 c stock !!!!!!!! You should try the numbers with 10 X production.
After that we went to the Golden Group factory. This is a very large place located close by. They house several of the Biotech companies of the Group as well as the Chemical division. The site is not exactly modern. It is and old Chemical factory China style. Meaning, forget about safety. The Biotech building looked more recent. The size of the land is around 100 to 200 acres.
The conference room was very very large (sorry no photo) On the walls they had photos of Mr. song with the Chairman of China Hu Jintao during his visit of the plan. Hu Jintao was seating at the same place I was (Too bad I did not have my VMC T shirt) . Mr Song is well connected.
The discussion covered many different subjects. I will give you the reader’s digest version of it because it was very painful at some points due to the translation.
Yes they now have a new WEB site. www.RBX-BMP.com. It is in Chinese only since they do not sale outside of China.
I asked if they will have an info page in English for stockholders. They told me that they are negotiating with a PR firm. I did mention that this could be done in a couple of hours!
They will be filling their 10 K on time and yes Q4 will be better than Q3.
Q3 was impacted by a big squeeze on pricing control by the Government. Several competitors did not survive. GENX did survive and increased their market share. The plant expansion will enable them to reduce the cost and maintain their profitability at the same time.
I could not get a very good answer about the tax liability due to late filling in 2004 and 2005. I think it is because the auditors are handling it and that the number is not significant.
Now for the infamous loans.
The loans have been made to several companies that are part of the group. There are no warrants attached as I previously believed. I made my point very strongly that this is not a good idea. They should have an arms length relationship between companies in the group. Their point was that it is the way business is done in China. The loans were used to finance the building expansion GENX is part of. Without the loans GENX would not have been able to expand production and marketing reach and be able to share resources with the other companies. It is true that GENX uses a lot of the Group’s resources.
I would not buy this in the US or Europe but this is China and I have seen the same thing done in several other companies.
However if GENX grows 5 or 10 X by 2008 who cares!
I asked again if they can really sale the forecasted output of the plant and the answer was very positive. The market is supplying only a small portion of the need. The problem has always been the cost. With lower cost the market will absorb the supply. This would mean that the revenue multiplier would be impacted but price sensitivity is only around 20 to 30%.
Their expansion to the dental market is also on track. 10 hospitals are now testing the product. This market could be larger than the bone injuries market and has a potential for Export. We discussed the export aspect. They would need to go the licensing way since they would no be able to resolve the regulatory issues themselves.
We had also a very long discussion about the stock market, investments in new venture etc. I told them some of the steps they have to take starting with moving out of .PK. and establishing practices that are in line with western expectations of public companies behavior. I urged them to do some PR about the company status and I will help them do that. I have a lot of work to do there but I will get there. BTW thanks to everybody that sent some private and public posts about .OB procedures.
Overall a good visit. If they execute the plan this could be an easy 5 or 10 baggers but this is China so who knows!
By keeping on top of them at least we have a better chance.
They invited me to come back in a couple of month. I guess they did not mind a shareholder asking questions.
BG
==================
how do we know that they are still in business and that they are producing profit (and not fraud like etlt of cxti)
Digi, when you visited , what do you see?
Digi and Mike, do you still own GENX?
I'm still holding but I'm down 90%+ now on GENX..
TIA
Stan
yeah days or weeks like this is probably one of the reason people are tired with this kind of competition.. dow down 1000 points in just a week or so.. (though it can boucne 100 points in just a few days too)
yeah nsom, hope people will join/re-join..
anyway, never thought I will see economy this bad in my entire lifetime.. but here it is..
I guess something we can tell to our children/grandchildren when we grow old (to be responsible with money, investment and spending)...
maybe we need to advertise more. not many new people added, while many of previous participants are tired watching negative returns due to the market is tanking...
I'm going to continue to play though.. free to play anyway.. keeps me entertained.. wile learning other people picks and strategies..
There will never be an agreement IMO. the stock going to be almost worthless, and I don't know what western is trying to do now (their real motives)
if it is too good to be true, 99% of the time it probably is..
I lost a lot of money in this stock and I learn a lot from it..
hope you all will learn something too..
Nice run today for HQS. here's the link to the sams club website where HQS sells their tilapia products..
http://www.samsclub.com/shopping/search.do?searchtype=simple&catg=1&simplesearchfor=TiLoveYa&simpleitemtype=0&x=15&y=3
DigiTech, ANy more info on GENX?
TIA
Stan
Mike, Do you have any other info on this company (or their existence and their seriousness about the business). TIA.
Rawnoc, thanks for the reply.
Stan