Savvy Trades and Investments

[Knowledge is King]

I've been a buyer of FCHS($.80), here's why:

According to the company, First Choice Healthcare Solutions (FCHS) is building a national collective of medical centers in key expansion markets throughout the U.S., with concentration in neurology, orthopaedics, spine surgery and interventional pain medicine, as well as related ancillary care services. Currently serving Florida's Space Coast, the Company's flagship regional network currently administers over 100,000 patient visits each year and is comprised of First Choice Medical Group (FCMG), The B.A.C.K. Center (TBC) and Crane Creek Surgery Center (CCSC).


FCHS features a very impressive multi-year revenue growth trajectory: 2011 $1.3M, 2012 $3.8M, 2013 $6.1M, 2014 $8.1M, 2015 $19.4M (forecast, $13.2M through 9 months), and 2016 $30M (forecast).

More importantly, the company reported EPS of $.027 in the third quarter on record revenues of $6.3M vs $1.9M. Given the company's revenue forecast for full-year 2015 and 2016, I believe FCHS can report EPS $.03+ quarterly going forward, with $.05 quarters likely in the second half of 2016.

If my estimates are on the mark, FCHS could report EPS of about $.16 in 2016, suggesting that shares in this rapidly-growing healthcare company are currently trading at just 5x expected earnings.


The company is quite bullish, as demonstrated by these comments from Pres./CEO Romandetti in the 11/24 PR:

...we are highly confident that total year revenues for 2016 will meet or exceed $30 million -- and that is before factoring anticipated organic growth from the introduction of new ancillary services to both FCMG and TBC and the notably higher volume of outpatient surgical procedures that we will be directing to CCSC."

On the conference call I hosted last week to discuss our third quarter results, I went on record stating that the regional network of medical centers of excellence that we are building in Melbourne, Florida has the potential to yield First Choice Healthcare Solutions over $50 million in revenues. Once we begin to replicate our proven business model in new expansion markets throughout the Southeastern U.S. which we have identified, our growth trajectory should be even more pronounced. In addition, we have represented, and will continue to reaffirm, that our balance sheet has never been stronger. We are 100% committed to increasing shareholder value, and we are succeeding...

The conference call (linked here http://ir.myfchs.com/) is a must-listen, particularly for the section where the company discusses expansion funding. If I understood management correctly, the Melbourne building which houses their operations (and also generates rental income) could be worth $14-15M against a mortgage of about $7M. I'd expect the company to do a sale-leaseback to unlock this value, and then reinvest those funds in expansion of its network.

Up-listing is also discussed on the CC, and it appears to be a management priority as demonstrated by the quote, again from the 11/24 PR, that the company intends to "actively pursue our objective of up-listing to the New York Stock Exchange in 2016."

Overall, with just 23M shares out fully-diluted, in my opinion FCHS shares offer a strong possibility of doubling in price over the next year.