Wow. I mean in a bad way. PILL announced earnings yesterday, late (never a good sign), and results were disappointing and prospects were poor going forward. The stock was destroyed in the market today, down 40%. Just like that. Went from a good $1.50 per share/35% profit to a 30% loss. I hope no one was following my lead here. If so, I apologize for sucking you into this hole.
I will probably hold to see what happens here. Conference call was pathetic. CEO had no vision. I would not be surprised if he was ousted. Two directors - Hudak and Schwartz bought 25,000 and 19,700 shares at an average $4.50 and $4.20 back in Dec and Nov, respectively. If I were them, I'd be very upset. At least my losses reflect those of the directors who will be very motivated to make back their money.
There is consolidation going on in the industry with McKesson buying PerSe. Lots of clearinghouses under pressure. But I smell opportunity here. It is very difficult to do what these clearinghouses have done and to make these connections to providers. Those connections are extremely valuable. I think this puts in a floor for the stock. The market cap is $40M, but they have another $28M in debt/revolving credit line. If they didn't have the debt, I would be buying tomorrow. I think I will wait for the dust to settle.
The key thing is that they aren't losing customers (although their customers are losing providers) which buys some time for these new initiatives (Phoenix, My MedAvant portal, payer portal, etc) to kick in.
Good luck.
Tom |
