It's been trashed because of arbitrage a few months ago on a private placement of Healthaxis.com (a private company which in September will be rolled up into the public company) shares owned by UCI, a distressed insurance company. UCI sold the shares because they needed cash. HAXS was in the high 20s when this pp took place. The pp was 2 million shares, DLJ worked it, and the buyer shorted a like amount of HAXS shares against the pp, which drove it down hard. The float is very small - 13 million outstanding currently, with 9 of that in the hands of institutions and insiders, 2 million plus in the hands of people I know and the rest out there for the public. Very large short position - in excess of 1.5 million.
Most casual observers and the Street (except for a few analysts who are better clued in) think of it as a website that sells health insurance b2c. That couldn't be more wrong. They have a proprietary softare platform supported by MSFT which has contracts with insurance payors to administer insurance plans for companies, government agencies, etc. either themselves or consulting via their legacy systems. They already have numerous payor contracts and I have heard that larger ones with really significant revenues are forthcoming shortly. This is a high profit margin business. The insurance industry has been slow to get on the internet but they are mandated by the new HIPPA regulations to do electronic processing and HAXS is a first mover into this space.
They are on the verge of being profitable. They have no concerns about running out of cash. You will see in the near future that they are focusing on the b2b business (outlined above). I believe once the Street becomes more familiar with what they're doing, the price will return to the 20s and 30s where it belongs, and possibly more by year end.
Here's a sample of their offerings to business:
HealthAxis offers solutions on an outsourcing basis. Outsourcing eliminates technological complexity and provides a guaranteed service level at a predictable price. The proprietary application systems are delivered on a transaction basis. All systems are Year 2000 ready and Internet enabled.
Applications Solutions
Insur-Claims®:
A comprehensive paperless claims processing solution that features, auto adjudication and PPO repricing for third party administrators, insurers, and self-administered groups.
Insur-Admin®:
A comprehensive eligibility system that features IVR and Web enrollment, group and individual billing, COBRA, and Flexible Spending Accounts.
Insur-Dental®:
A complete paperless dental claims system that features auto adjudication and X-ray imaging.
Insur-Enroll™:
A flexible, employee self-service benefits enrollment system that utilizes both Internet and Interactive Voice Response (IVR) technology.
Insur-Web™:
An Internet engine that extends the functionality of current HealthAxis products or client's legacy systems by providing a secure, scaleable Internet interface.
Insur-Image®:
An imaging/OCR workflow solution that can be integrated with the HealthAxis claims processing system or any other claims processing system.
Insur-Voice®:
An interactive voice response system used to establish eligibility, to determine claim status and for open enrollment.
Professional Services
HealthAxis services go well beyond proprietary application solutions. HealthAxis offers full platform outsourcing, systems integration as well as maintenance of client's legacy systems. Specifically:
Application
Management:
HealthAxis provides maintenance of legacy applications whether custom-developed or based on a third party package.
Systems
Integration:
Our skilled developers and project managers design, develop, and implement custom- or package-based solutions for the healthcare industry.
Computing
Services:
HealthAxis provides operations management for MVS mainframes, UNIX and NT servers. We design, implement, and manage voice and data networks and the distributed PC/LAN environment.
Data Capture and Image Retrieval Services
HealthAxis is an industry leader in providing comprehensive data capture and image retrieval services for healthcare claims processing. The services include:
Mailroom
Operations:
HealthAxis provides a full array of mailroom services for healthcare administration.
Imaging
Scanning:
We utilize our proprietary Insur-Image scanning platform for claims attachments and related correspondence.
Data
Conversion:
We utilize OCR/ICR capabilities and manual data entry to convert from paper or image to EDI transactions.
Image Storage
& Retrieval:
We provide claims image retrieval services via the Internet. |
