I can think of no better proof of your sentiment than the fact that record revenues were being recorded when I bought the stock last January at 1.50. As we've seen from previous 10K's, cash is VERY tight (i.e. as was said today, in one day, back out to a vendor the next.) They call it "muddling along".
So they don't have much choice other than to grow revenues and cut costs asap. They will pile up debt but hope the payments on it AND the expenses will get into line quickly enough.
I DO like what they have done so far with spinning off unprofitable unit, closing NH administrative offices and moving to Boston to consolidate, and outscourcing MIS.
I think this management is solid.I actually think from watching them that they WILL do it! BUT, the job they have to do is much bigger than I had hoped. This company could easily have done a Chapter 11 if old management had stayed a little longer.It was REALLY bad, as evidenced by writeoff after writeoff. I criticize this management team for not being forthright about how bad it was.I also see them presenting too rosy a picture in Q2 conference call.
Nursing homes are not high margin. You can't get out of a hole fast. Now, IMO, in order to present a good picture to institutional investors, they must be able to show increasing profitability, so Mr. Strickland's idea of hitting the road early next year seems optomistic. I'd rather they do more of what they did today...tell us what's likely, not what we want to hear. We're still in the "cautiously optomistic" stage. It'll be a while. Unless we get closer to my average price, I'll wait. In the mean time I'll buy in the .60's and sell in the .80's to slowly earn back what I've lost, as that pattern has come up a few times around earnings.
In short, THEY ARE DOING IT. But it's going to take a lot longer than I hoped. They also can't book " dramatic" revenue and earnings growth like previous administration, because of the shift in how they earn, and because they're more honest fiscally.
If they were really into improving shareholder value, they'd try to become an aquisition target for one of their larger local competitors., who had the pockets to put their rescources to use and develop economies of scale.But administrators like their independence and job security.
Any thought, Kevin or anyone?
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