James, Re: OXHP
I've been posting the positives over on the OXHP thread the last
few days. I agree that the WSJ article wasn't that bad - the
last half of the article was very positive (doctors not fleeing,
patients not fleeing, adding 400,000 net next year). And the
NY Times article this morning was interesting but not entirely
accurate.
This was a huge hit though the 164M. I think that the price
reflects that, but a losing stock in December will see a hit
on news like that. And add in $28M for non-NY subsidiaries. The
loss of 120M means that operations are still profitable.
Right, but... Wiggins even now is trying to play the analysts.
He admitted only on further questioning that he was including
an $18M one-time gain on the sale of a subsidiary in that
loss. My biggest worry is management integrity.
They had 1.006 billion in premiums receivable and cash (ok'd
by KPMG). They had about 565M in claims payable. That gives
them say $450M in play. Then you take back $192M in 4th Q
charges. So now they have like $200-250M in liquidity on
their balance sheet. Not bad for a 1.6B company. But they
still have fines, lawsuits above their insurance cap,
and the "restructuring charges" that will inevitably come
down the pipe as they shut down and restructure various Medicare
operations.
Now, the patients still like them. The patients chose them
Number 1 in NJ just in September. And the patients chose them
among the top two in NY in May. And the providers aren't fleeing
(yet, at least). As a physician, I can't express how impressed
I am with that.
But now their financial stability is threatened, and the big
boys in NY (WSJ, NYT) are
reporting it. Can they keep their franchise in customer
satisfaction in New York? This is an open question. Like you say,
value investors should not be surprised that there is bad
news behind a 70 point fall from 90.
I feel duped by the company, but now the trick is to keep a level
head and figure out what I'm going to do tomorrow.
Good Investing,
Mike |
