RCMT elevator pitch
Added some today mostly in the 1.50’s.
Elevator pitch is simple. They earned a normalized .30+ a share last year, but a third of their revenue comes from staffing nurses at schools, and that revenue was devastated.
When schools open it’s not like cruise ships where there are open questions. I think that revenue comes back immediately when students return.
On top of that they have cut sg&a to the tune of about .45 a share already annualized.
So figure 2/3 of that is sticky cuts and apply 25% in taxes and you get a normalized .50 or so a share all else equal in eps, based on last years share count, but there were 2 million shares retired recently which gets us closer to .55 a share.
Now there could be revenue fall offs in their other businesses, but I don’t expect that to be worse than what we have now, and they would have earned ballpark .08 a share in their seasonally weakest quarter had their school business matched last year. There is also the possibility their other businesses grow.
Interest expense should also come down as they got aggressive about collecting receivables and greatly reduced their borrowings.
Insiders also bought 250k shares recently at 1.20.
Finally they added a sales guy to sell telehealth services which adds a sexy angle.
They do have decent revenue concentration with ny and Hawaii government accounting for about 28% of their revenue combined.
