I agree, I couldn't say it much better than what was in that article. In a line, PFHO under CA regulations allows companies to have firms like itself manage workers compensation claims, so that costs are contained and workers return to work faster, saving corporations money. It is a HR function which can more effectively managed by managed provider networks, than a company going it alone.
Both companies are optimistic about their growth and opportunities. I believe either company is fungible, meaning, a easy sell to another health care provider, as well as be a good fit for a company, either smaller or larger, to capitalize on this company.
I believe there are also external growth opportunities outside of what they are exploring now. If you look up Tom Kubota's publicly available bio, you'll see extensive Wall Street experience. I think that will be big card up their sleeve if they can identify something worth pursuing. The few times I've talked to him he has always told me that they are working hard to bring value to shareholders. Indeed they have.
As I've said, if PFHO has EPS last quarter higher than 50 cents, and CRVL has earnings of 41 cents, which stock should be higher?
I don't know your situation, so I wouldn't recommend to anyone to buy or sell the stock. I can just tell you that I have looked at almost every company with a market cap under $50 million, and haven't found one that has all this:
* Fully Reporting Company
* Positive Shareholders' equity
* Low debt/liabilities
* Low (in this case microscopic) outstanding shares
* High insider ownership (Tom K's near 60% ownership means our interests are aligned with his.
* Decent growth rate
* Fungible industry metrics
* My favorite: NO DILUTIVE SECURITIES OF ANY KIND. No warrents, debt converts, and not even any options. You know what you own today won't get diluted!
* Reasonable CEO salaries
* Undiscovered by Wall Street - gives us real opportunity to grow.
Okay, risks?:
* Stock can be illiquid. If you are an investor, no big deal, but if you need funds, it is something to consider
* Changes in regulation? Nothing I am aware of, but naturally if Obamacare over reaches somehow, such as a single payer system, it could change the business plan. It was one of the questions I asked when I first purchased my shares. Remember, this is not health insurance for the individual market, so the company isn't as affected as would be health insurers. Don't forget with change also comes opportunity, but it is a risk as with any company in any field.
* Overall decline in the economy. Fewer employees, fewer enrollments.
* Competition. Least of the risks, IMO. The company has good depth in the services they offer, and have implied they will be offering more.
This stock was a penny stock but a few years ago. There are some penny traders or market makers that can't see beyond their profit and loss screens. Also, it looks like we lost a 5% holder which added some overhead. That person should have filed a 13D - but that will be an issue between them and the SEC. The only thing I know is that if they sold before this earnings release, they have to be eating their heart out - and I think won't want to see where we go in the next few quarters.
With so few shares outstanding, I really think the risk is bigger that a meteoric rise will happen (which I hope doesn't, because I hate hot money ruining charts for everyone).
Good luck with whatever you decide. I can't tell you whether it will go up or down from here, as I've been confounded by those who sell on such large downticks when they could have gotten off more waiting for people to buy at the ask. I think I'll be as confused whenever we get to the $100 or $200 mark as well, as right now, I see myself holding every single share till then, unless there is a financial hardship where I would need some funds, or something unforeseen changes with the company. Likely, I'll end up selling my holdings when Tom K does, to a much larger company. I don't think he will ever sell in the market, not at least while we are still a nanocap and unlisted.
Don't be afraid to post your thoughts or comments. As you can see, we really don't have a lot of people that have found this gem --- not at least yet.
