Pacific Health Care Organization Inc. (PFHO)

[DragonKrys]

I didn't say $3.20 for the year. As Rawnoc noted, I said run-rate -- or 80 cents in Q4. For the year I've modeled 9.1M rev and 5.4M opex, which with a consistent tax rate yields roughly $2.70 eps. I'm assuming minimal increases in salary expense, as I'm unaware of any additional hiring YTD.

PFHO is a bit of an oddity for my investment style. I tend to favor microcaps with higher barriers to entry and ideally a disruptive technology (like Kelso Tech which I recently exited, or OptimizeRx which I recently entered) that make multi-year financial modeling a bit more reliable. Still, it seems reasonable that PFHO could get to 20M in revenues in 3 years which would likely yield more than $8 in EPS, and that's before even considering acquisition opportunities with the increasing cash flows.

I was attracted to PFHO last year for its consistent growth, operating leverage, clean share structure, CEO ownership, and increasing revenue diversity both in customer count and service offerings. All of these factors remain true today, while still relatively undiscovered with a reasonable valuation. The volatility like today just provides for some profitable trades along the way.