Jeff, Thanks for replying...it is so quiet here, and also quiet
in the news and analysis. I personally, think it is just terrible.
I am assuming you owned ROTC too, not IHS. I am a new NAIC investor,
and ROTC was one of my first 4 stocks, and I thought I had, by
myself, found something really good. ValueLine page 32 and
page 36 listed potential appreciation 3-5 years at 140%-260%
approx. Good management, etc.
I got different numbers than you faxed to me by broker from S&P
stock reports. I got a negative eps of -1.20 for 1995, and a
negative tangible book value for 1996 of -1.58. I will copy
some of them here, along with an email I sent to Better Investing
email digest I-Club-List... I am more familiar with ValueLine than
S&P, but these numbers look bad to me. I am thinking of selling
on Monday, though I wasn't even in long enough to make $150. Yet
I had about a 25% gain in 3 months.
Let me know if you can think of a reason not to sell.
---------
Below is the post I sent to the NAIC digest:
I am very unhappy about the purchase of RoTech Medical by
Integrated Health Services IHS.
1. Why weren't the stockholders notified about this first?
2. IHS is not in the regular ValueLine, though they have at least
8 years' history. Even if they are in Expanded Valueline, I can't
get the VL analysts' opinions and projections.
3. ROTC growth over past 8.5 years = 1602%
IHS growth over past 8.5 years = 124%
BMET growth over past 8.5 years = 310% (just as a comparison)
4. ROTC was projected at 140-260% appreciation. I had chosen
(by myself) a company strong in management and fundamentals that
was undervalued (15 when I bought it in April) with a great upside.
I haven't spent a great deal of time exploring IHS, but I did notice:
the eps was _very negative_ in 1995. This is a _definite no-no_ in
my book.
1996 1995 1994 1993 1992 1991 1990
-------------------------------------------------------------
eps 2.03 -1.20 1.96 1.36 1.04 .82 .42
tangible
-------------------------------------------------------------
book value -1.58 6.23 22.24 12.28 12.38 9.75 -150.
-------------------------------------------------------------
cur ratio 1.2 1.6 1.4 1.6 7.4 3.2 1.1
-------------------------------------------------------------
%LT debt
of cap 65.1 61 51 58 49 35 69
-------------------------------------------------------------
% ret equit. 10 NM 9.4 9 9 NM NM
-------------------------------------------------------------
% net inc.
of rev 3.3 NM 5.2 6 6 4.1 1.7
-------------------------------------------------------------
pre-tax inc. 11 -42.3 56.3 29 19 8 1.6
So, again, let me know if you can think of a reason not to sell.
Performance of "1" where 1 is best, or worse?
Debt is terrible. ROTC is 37% debt.
Yes, please email me the other information you have. I will try to
do a Stock Selection Guide from NAIC this weekend on IHS.
thanks for replying. What is your history with ROTC?
Etana Finkler
Senior Partner of The Stockettes Investment Club |
