Hi Jim,
Thanks for finding the thread! I was begining to wonder if anyone would find it. I've been invested in PPH for a couple of years now, and followed them for four. Unfortunately I got in at $22, so I'm behind as usual.
I also like that they didn't dilute the shares. From my conversations with Ken Wexel(sp) it sounds like they were very conscientious of that as well. Their intentions are to convert the 2.5M convertables within 12-18 mo, because they expect the price to be well North of 27 by then. They also want to pay off the loan quickly with the profits from the HIP deal.
My understanding of the numbers is that they get 91.5% of the premiums which equals $25.6M/mo ($140/mo/person x 200,000 people x .915). They expect total expenses to be <88% of the premiums which is $24.6M/mo (28,000,000 x .88), which leaves a profit of $1M/mo, or $3M/quarter, or $.23/share/quarter. That plus the $.08 is $.31/s/q. With a PE of 25, the share price should be 31! Their president said at the shareholder meeting that he expects $2M/mo, although I don't know where he gets that from. I guess we'll find out on March 17th when they release the results for the third quarter.
Also, Ken did mention that the 100M in shares authorized serves the purpose of giving them leverage in merger talks, in terms of which company might be the parent vs. being swallowed. Very Interesting!
If you have any info or numbers, please let me know, especially if you can show me where my numbers above are in error. It sounds like you have some more intimate knowledge of the people in the company. Other than the high salary of the chairman, do you know anything else that might be usefull? I could really use a winner, and I am hoping that this one is it!
GLTUB
Kevin |
