Savvy Trades and Investments

[dmmm]

FONR 2 snippets I wanted to share. Someone on the yahoo board mentioned it may be down due to fear about Medicare reimbursement cuts. Turns out in the 2016 proposed rule (released July 8 for final rules to be released Nov 1 to take effect Jan 1, 2017) the combined effect of the new rules on "allowed charges" for diagnostic imaging centers, like FONR's, would be +1%.* That sure seems like it covers FONR. Remember I am treating their non-profit medical device business as an advertising wing of their management business. Funny thing is they just about say the same thing in their last 10-K.

Also did anyone else notice they spent $1.1M on buying out NCI in one of their subs in May on top of the $5M in Jan? Those are great transactions IMO. It's hard to tell but from comparing financials it seems they are paying about 10X pretax for the additional cash flow from the NCI, a good deal, especially since they have NOLs to use.

My rough DCFA is saying they are selling for about their no-growth value without the NOLs and should be worth $14-15 depending on how you value the NOLs (i.e. how fast they realize their value & how you discount it to present). Also they have an easy path to earnings growth by spending their next $2m on buying out NCI, which would increase earnings by something like 20%. I already have about as much as I can buy with an average in the $9.8s.

Good Luck all.

As always this is not investment advice, but some teasers to get people interested to do their own research.

*Source (Table 45): https://www.federalregister.gov/articles/2015/07/15/2015-16875/medicare-program-revisions-to-payment-policies-under-the-physician-fee-schedule-and-other-revisions