HLTH
I did buy some HLTH today at various prices from $1.35-1.40 here is what I like.
1) Q4 although seasonally strong looked pretty good considering it was negatively affected by the hurricanes. If you ignore the tax bill they had and excellent quarter considering.
2) Guidance looks great, these guys have reason for missing revenue guidance though. The hurricane which I can excuse nobody can see that in advance. And they decided to get out of this low margin lab stuff. I also like the acquisition as well. If you did the math on guidance I think they will earn about .20-.25 in fy 18 fully taxed. These guys will benefit as well from the tax cuts enacted in 2018.
Conclusion: I think this healthcare stock if it can show the growth they talk about and refocus on profits like q4 showed considering how down revs were for the two good reasons they gave with ignoring the tax rate. They also talked about reduced seasonality going foward which I think will help the valuation. I strongly believe they will hit guidance shown by how they were able to drive profits this quarter with the lower revs, plus they had a 2.4 million bad debt expense. That expense appear to only show up in q4, versus a 400k recovery in the prior year. So that held q4 results back as well. I think the moves they have made plus the acquisition will help them hit guidance, and a healthcare stock like this that shows growth should trade at at least a 12 multiple given .20-.25 eps expectations, I could make a case easily for the mid 2's in 2018 for HLTH. All is just my opinion, and I could always be wrong though.
