Value Microcaps Motherboard

[stanu78]

Skkilz you are right on the money on MDF..
I agree with what you said..

that's why I think the stock will go down on Q105 earning..
and I don't know why I am still holding..

maybe feeling that the future is bright for MDF..
short term sacrifices for long term benefit..

However one can argue that the PSN business itself is a solid $8M annual net income business.. and if the company can invest that $8M wisely (which is probably the HMO initiative as they know a lot of part about HMO business) they could make a lot more money.

and another thing that I learned from Bobwins about MDF is that though their profit structure seems to be proportional to the number of enrollment (meaning earning can go up 10% if enrollment increase 10% or the premium increase 10%), the reality is that if enrollment increase 10% profit can increase more than 10% (15%, 20% so on so forth) because a lot of the business is fixed cost (such as doctor salary etc)

but there will still be a cap on those kind of increase because one doctor can only handle so much.
which will be an interestin gquestion is at what capacity they are currently in..
how many more members can they take before they have to add more fixed cost...

I'm bullish on this stock (3-5 years).. but short term wise (3-6 months) I'm very bearish...

so all in all (in average) I'm maintaining a HOLD rating on this stock...
and if you can't handle a short term dip (let's say below $2.5) then you better sell now...

Stan