CONANN:
In 1996, the same story was told about how EAR was going to add over 200 centers with more than enough cash on hand from a previous stock offering. A new computer system to tie all the centers was purchased, contracts were added with HMO's, everything looked great. After a while, all the announcements did little to positively affect share price because earnings did not materialize. The company has always said that EAR is a long term investment. With that in mind, I would do two things. First, don't expect share price to do anything until earnings increase to the positive. I wouldn't look for that to happen soon. Remember, investors in 1996 thought it would happen in 1997. Has it? Second, do the math on this one. Is it really worth $2 a share? If the company were to post substantial earnings soon, possibly. Since this company, by its own admission, says it will take years to boost share price, one has to look at the ACTUAL value today. Not what it is selling for but what it should be fairly selling for according to value. I no longer hold shares of EAR. I may once again when I think it is selling for fair value. I'm sure many investors thought they were buying fair value at $6 and higher a year ago. Would you pay that much for EAR today? |
