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Management's opaque accounting has drawn criticism from the shorts: http://seekingalpha.com/article/4011499-celadon-group-sec-inquiries-accounting-issues-liquidity-constraints-point-65-percent-near
Additionally, Covenant Transportation Group released lower than expected guidance which sent all trucking stocks tumbling.
Taking Celadon's numbers at face value, I had previously come up with a $12-18 fair value range, but I haven't had the time to investigate the supposed accounting irregularities.
I have looked into the CSA scores issue, and it is not anything to be worried about yet. They just crossed the thresholds, but there are carriers who have been above those thresholds almost continuously since 2010. As long as they don't completely blow off the fmcsa, their chances of getting an "unsatisfactory" rating are almost zero.
Looks like he was somehow involved in a SEC investigation of a Medical Marijuana company last year:
http://www.prnewswire.com/news-releases/shareholder-alert--pomerantz-law-firm-announces-the-filing-of-a-class-action-against-medbox-inc-and-certain-officers--mdbx-300028321.html
It seems the company ultimately disagreed with his accounting practices as CFO and had to restate earnings to recognize revenue as having occured later:
http://www.marketwired.com/press-release/medboxs-largest-shareholder-comments-on-recent-events-companys-outlook-2015-otcqb-mdbx-1979765.htm
I see Dart container -- are there more customers?
Looks like Dart has 15,000 employees worldwide, but only a small fraction at their Corona, CA facility -- so probably not a material gain for PFHO.
A board member resigning is always interesting -- anyone have the scuttlebutt?
I'd be a buyer at $7
They actually seem to be doing a decent job of adding new business:
http://www.medexhco.com/provider-relations.html
vs
https://web.archive.org/web/20150814031851/http://www.medexhco.com/provider-relations.html
https://web.archive.org/web/20150619114105/http://www.medexhco.com/provider-relations.html
Lost:
Amtrust (previously disclosed)
City of San Jose
Gained:
Preferred Owner Group
AAA of Southern California
City of Carson
City of Oceanside
Guess we'll see in August how close they come to filling the hole Amtrust left, but I think the current market price is overly pessimistic so I'm long...
Just don't expect to get in & out of a position easily -- not with a $3 bid-ask spread on an $8 stock...
“I buy on the assumption that they could close the market the next day and not reopen it for five years.”
Warren Buffett
The Big Short's Dr. Michael Burry goes long on Amgen in Q1
http://whalewisdom.com/filer/scion-asset-management-llc#/tabholdings_tab_link
One of only 8 positions, the 40,000 shares represent ~12% of Scion's portfolio. During Q1, the stock traded from $141-$158.
Buffett didn't buy AAPL, one of his lieutenants did...
http://blogs.wsj.com/moneybeat/2016/05/16/berkshire-bought-apple-but-warren-buffett-didnt/
Buffett said at this year's meeting that he focuses on >$2b investments...
10q was better than I expected: they posted a profit, doubled hco enrollment, didn't lose as many MPN customers as expected, and they've managed to appropriately scale back costs.
A $6.4m market cap seems awfully low for a profitable company with $4.4m cash that has grown over every 5 year period (despite recent, large, setbacks).
The Reporting Person intends to ask the Board to establish a series of preferred stock that would vote with the common stock and not as a separate class, in most matters. Each share of such series of preferred stock would vote as a multiple of a common share on all actions requiring a vote of the Issuer’s common stock. The determination of the size of such multiple, as well as the other rights, privileges and preferences would be made by the Board. The Reporting Person also plans to request the Board sell him such number of shares of preferred stock as the Board and Reporting Person agree for such consideration as the Board deems adequate.
Anyone else notice this new item in the sc 13d/a etablishing a preferred class and selling the shares to the ceo?
Then you may be interested to know that AmTrust is the subject of multiple shareholder actions, including a lawsuit alleging insider trading...
At these prices, why isn't Kubota buying additional shares with some of that ~$600,000 dividend payment?
Tom Kubota bought $41,250 worth of stock (1000 shares) in the last year or so -- roughly 20% of the $225,000 compensation he received from PFHO. This dividend will give him ~$600,000 pretax and he won't be limited by the same trading restrictions placed on company share repurchases...
...will he be buying Sept 25?
You're right, forgive me. I was thrown by the name Arissa, that it offers lien negotiation services in SoCal, and that it is managed by the same Kathleen Torres whom headed Arissa Managed Care & was a director at PFHO.
I can't find mention of her departure in the PFHO SEC filings, but I did notice she is also a managing partner at DecisionUR along with fellow former PFHO director Lester Slacks.
Regardless, way too many red flags for me...
Enjoy your dividend... panem et circenses
I consider Arissa a major acquisition. http://www.arissacsconsulting.com/
"Medex Legal Support" is not a comprehensive description of the services Arissa offers:
24/7 COMPANY DOCTOR
MEDICAL BILL REVIEW
UTILIZATION REVIEW
CASE MANAGEMENT
CUSTOM MPN’S
LIEN NEGOTIATIONS
Exactly...
Acquisitions like Medex Healthcare & Arissa Managed Care cost money...
I dunno, I think the dividend concedes explosive growth is over...
Is there anything management could do that would make nano happy?
I noticed that on my 2nd read.
I also notice language suggesting they didn't "lose" that major MPN customer, but rather ceased doing business under the reduced terms of the new June 2015 contract.
That customer did ~$500,000 of the ~$1,000,000 MPN revenue for 2014, which suggests the June 2015 MPN enrollment figure of 602,000 might be just 300,000 today.
That would mean total enrollment is 440,000 compared to 621,000 last year. Ouch
I suspect that is why they went from buying 2500 shares in a month to just 400 despite lower prices
Oh and only ~3500 shares repurchased, ~400 of which bought after June. ~$300,000 out of $500,000 remaining in the repurchase plan.
10q out -- on top of Companion, they lost a MBN customer in July who contributed $500,000 in revenue last year. Enrollments up, expenses up (new lease into expanded offices), crazy turnover (of 14 new hires, 2 remain). And a senior manager resigned in June.
Guidance suggests it will not match 2014 profits for the remainder of the year.
PFHO reported the loss of Companion in the 10k...
Amtrust was 19% of their business last year and they're heavily advertising for WC-related job openings in Irvine, CA: http://www.glassdoor.com/Job/irvine-amtrust-financial-jobs-SRCH_IL.0,6_IC1146798_KE7,24.htm
or wanting to buy low...
PFHO share repurchase questions
1) Do "privately negotiated transactions" have to abide by 10b-18 rules or do the rules apply only to open market transactions?
2) Aside from not exceeding the price of the last transaction (or highest independent bid), are there any rules PFHO has in place with regard to share repurchase price? E.G. Buffett won't repurchase Berkshire above 1.2x book value -- has PFHO placed similar valuation metric restrictions on their repurchases or will PFHO's broker keep buying mindlessly even if a few idiots place market buy orders and the stock jumps ridiculously?
3) If there are no transactions on the open market for a given day, does that prevent PFHO from being able to repurchase shares for that day?
4) If he were so inclined, could Tom Kubota sell his shares back to the company using the repurchase plan (assuming the transactions otherwise met 10b-18)?
My muddled thoughts:
As of 5/29/15 PFHO had purchased 4,710 shares for $169,118 (average price: $35.91). It still had $330,882 remaining.
At today's price (~$31), that means ~10,500 additional shares could be repurchased, potentially reducing share count to ~787,000.
But 10b-18 says a maximum of 25% of the average daily volume (currently ~530) can be repurchased and only before the last 30 minutes of the day. That works out to ~130 shares/day, which would take at least 80 consecutive trading days (~4 months).
But PFHO is illiquid; 0 shares traded hands for 20 trading days out of the last 2 months. And there were probably other days where there was no volume until 30 minutes before closing -- would either of these scenarios block repurchases for that day (even private transactions)?