From the blog on www.microstockprofit.com
On Track With Union Dental
Did you know that Kenny G is a great golf player? And these days has more time to golf than ever, not because his muzak can be heard across the globe, but because he was one of the 10 original shareholders of Starbucks! Who would have guess that coffee, a long time staple across the world would take on new flavors and fancy names and become a hot item in the business world, not just commodities. Kenny G spotted an opportunity by looking closely at what society was putting higher on its priority list.
Say Cheese!
Teeth for instance. I know. It sounds pretty silly but think about it. Look at the emphasis our culture puts on a healthy smile. Braces, once feared by teenagers everywhere has become a typical rite of passage. Teeth whitening products may be costly, but just ask the consumer boasting a beaming set of teeth if it was worth it. Of course! Priorities!
A Household Necessity!
Viewed as a symbol of wellness in our society, a nice pair of pearly whites has been credited for closing many a deal. Unfortunately, for a growing number of Americans, it is becoming simply too expensive to maintain dental health (Americans spend > $70 billion per year on dental procedures). Giving credence to this statement, a bit of digging uncovers that dental costs have skyrocketed up more than 50% over the past 10-12 years.
Dental insurance is becoming a household necessity. However, options are extremely limited for many, including the elderly (Medicare has no dental coverage), the disabled (Medicaid is reducing coverage in some states) and those working for small businesses. However, there is hope for America's 15.4 million union workers.
This has investment opportunity written all over it. Lucky for you, we have already done some scouting and have found a solid smallcap company that will make a strong and profitable addition to your portfolio.
Our newest portfolio company, Union Dental Holdings Inc. (OTCBB: UDHI) has been dedicated to making dental coverage more affordable for U.S. union members for more than two decades and continues to expand its network.
Its the Big Unions!
Initially focusing on bringing a cost effective dental program to the Communications Workers of America ("CWA"), which consisted largely of workers from AT&T, Bell South, and Lucent Technologies, UDHI has since amassed a network of nearly 1,600 practitioners spanning more than 15 states. By utilizing the existing insurance of the union client and fostering partnerships with dental groups in key geographic locations, UDHI is able to drastically reduce out of pocket expenses for the client while matching them with an optimal provider.
Obviously this plan can't work without signing on some major unions with some significant member populations. Not a problem for UDHI. The company is already working in conjunction with a number of massive outfits including, the:- Communications Workers of America (CWA) - (700,000 members)- International Brotherhood of Electrical Workers (IBEW) – (750,000 members)- United Association of Plumbers and Pipe Fitters (UA) – (300,000 members)- Association of Flight Attendants - Communications Workers of America (AFA-CWA) – (55,000 members). Take into consideration that unions are growing at their fastest now than in the past 20 years and you can see where we are going here.
Monetizing the Situation:
Announcing recently that 2006 revenues are expected to be in the ballpark of $2.2 million (up nearly 7% from '05), UDHI recently stated plans to expand its network by an additional 2,000 dentists over the next 12-24 months.
So how does this operation work? Just how does UDHI rake in millions by basically acting as the middleman?
By entering into exclusivity agreements with union organizations, under which UDHI; is guaranteed sole access to potential union dental patients within specified geographic boundaries, the company is then able to charge dentists a fee to access the operating zone. Fees, according to the company, average out to approximately $5,000 per contract.
With more than 20 years worth of experience and industry contacts, a member base possessing $192,000,000 in annual purchasing power, and the proven ability to provide affordable dental care to union members, we don't anticipate UDHI having any problems attracting new dentist partners.
Apparently management feels the same way. In today's most recent release,U DHI stated that the company hopes to penetrate 5% of the country's 200,000 dentists over aspan> the next few years. Let's do a little math here: (200,000 dentists x 5%) $1,500 (per zone access charge) = $15 million in revenues, not too bad!
Of course, one of the biggest complaints among medical practitioners who work with insurance companies, is the delay with which they are paid. Voila! Problem Solved. UDHI Transax International, to provide a claims adjustment/payment processing system that will assure payment reaches doctors/dentists within 24- 36 hours of the patient being treated.
If the prospect of receiving payment in less than two days, rather than turning bills over to collectors and potentially recovering only a portion of costs, doesn’t attract a few customers, who knows what will.
At the most recent market price of less than five cents, we see a tremendous upside to what is going on at Union Dental Holdings Inc. (OTCBB: UDHI). The company's recent agreement with AFA- CWA opens the door to the employees of such airlines as United, US Airways, Northwest, Aloha, Air Wisconsin, Air Tran, America West, American Eagle, Atlantic Southeast, ATA, Piedmont, Miami Air, Alaska, PSA, Mesa, Mesaba, Midwest, Spirit, Horizon & Hawaiian.
Start your due diligence on this one. Kenny G did not invent Starbucks – he just saw opportunity written all over it!
