I have been looking at this stock for a while and wonder if anyone
has any insights into the company. As far as I can see, things
look pretty decent. The company provides rehabilitation therapists
to hospitals -- an outsourcer, if you will, for that service.
RHBC has a presence in all 50 states, but I do not know their share
of the rehabilitation market. That business seems to be in line
with the well-known demographic trends brought on by the baby
boomers (meaning that I expect that RHBC will have plenty of
business providing physical therapy to boomers with broken hips,
surgery recovery needs, etc, for many years to come).
I have a few numbers that seem interesting that I will try
to summarize below
Year PE Price/Book Price/Sales EPS
Hi Lo Hi Lo Hi Lo
92 20 10 3.7 1.9 0.8 0.4 0.63
93 21 10 0.8 0.4 0.73
94 21 12 2.6 1.7 0.9 0.5 0.88
95 17 10 2.8 1.5 1.0 0.5 1.05
96 19 11 2.0 1.3 0.9 0.6 1.39
97 25 13 3.3 1.6 1.4 0.6 1.94e
98 2.27e
Based on current price of 29, the following are some of the basic
numbers.
PE(TTM) 17
PE (e97) 15
PE (e98) 13
Price/Cash Flow 13.0
Price/Book 2.5
Price/Sales 1.0
In April, MF ran a very positive report on "Stocks to Love" in
which one of the fools picked RHBC. It is decent reading if
you are interested in this co.
Based on consensus estimates, RHBC is growing its bottom line
at 21%, 19%, 32%, 40%, 17%, year over year, beginning with 1994
numbers. The predicted drop off from 40% to 17% is something I
have not yet been able to explain.
In addition, the company recently released a statement saying
that the recent congressional changes to health care policies
are "supported by the company" and, in another section, said
to be in line with the company's outsource concept. This may
alter the predicted earnings somewhat, but I have not seen this
yet. I believe that the estimates derive from the predictions
of 4 analysts, but I do not know which firms follow the
company.
Volume is usually painfully low (<100K shares / day), but if
Peter Lynch is right and earnings drive prices over the long
haul, this company seems something that has been overlooked.
I do not know the institutional ownership numbers.
Just using an average high PE of 21 and average low PE of 15,
it looks as though it would be reasonable to expect that a
reachable high price for 97 could be as high as 41 (using
estimated earnings). The low by the same method is just about
what it is now, 29. For 98, these same figures reach a high of
47, with a low of about 34. I don't mean to say that these
are predictions, just rough guides that I personally use to get
a rough order of magnitude of reasonable possibilities.
I usally like to try to find some way to try to look a little
farther out, say, 4 to 5 years. My goal is to at least double
my dollars in that span.
From here it looks mighty do-able.
I would love to have comments especially if you know the answers
to any of my 'unknowns' above.
Regards,
J |
