Pacific Health Care Organization Inc. (PFHO)

[FrankLind]

The market has it wrong - imo

Increasing enrollees
As of December 31, 2014 we had approximately 659,000 total enrollees. As of March 31, 2015 we had approximately 674,000 total enrollees.

Subtle wording change on UR fees prediction....

Last q - "Unless we are able to attract additional new customers in 2015, or our third-party partner requires addition overflow services, we anticipate UR revenues will be lower during 2015."

Now - "Unless we are able to attract additional new customers over the remaining months of 2015, or our third-party partner requires additional overflow services, we can give no assurance that UR revenues in 2015 will exceed the levels realized during 2014"

UR fees
Have had a roughly a 230,000 increase in UR fee excluding the UR overflow business.

Lien business is increasing
"We anticipate revenue from our lien representation services will grow moderately in future periods." If history is any guide, the phrase moderately means quite a bit.

Bought back shares

Op leverage'
Said they expect just marginal increases in GA costs.

With 3.2 million on the balance sheet, that cash is going to be used for something at some point that will benefit shareholders. Either accretive acquisitions or further and larger buybacks.

Overall, I think the expected increases in enrollees, UR review and lien business will more than offset the loss of MBR fees.
PFHO is trading around 12 times what I expect them to earn for this year. Too low for a business and CEO of this quality.