Hi Terry,
bigcharts.com
PE VALUE?:
NASDAQ: (FPAM : $11 9/16) $110 million Market Cap at May 11, 1998 Trades at a 63% Discount PE Multiple of 8.4 X, vs. the 22.8 X average multiple at which the Medical Services SubIndustry is priced.
SHORT INTEREST:
Short interest increased 8.6% from March to April 15 to 10,660,965 shares on 1,852,903 average shares traded. A short squeeze is possible with some good news.
LATEST NEWS:
FPA Medical Managmt Outlook Revised to Stable by S&P
----------------------------------------------------------------------
NEW YORK (April 13) BUSINESS WIRE -Standard & Poor's CreditWire 4/13/98--
Standard & Poor's today revised the outlook on FPA Medical Management
Inc. to stable from positive. Additionally, Standard & Poor's affirmed its ratings on the company (see list below).
The outlook revision reflects the diminished likelihood that the
company will be upgraded in the next several years due to the company
posting weaker operating results and higher debt levels than Standard & Poor's previously expected.
The speculative-grade ratings assigned to FPA Medical Management
incorporate challenges associated with integrating recent and proposed
acquisitions, and the company's short record of success.
The San Diego, Calif.-based company is a leading physician practice
management company focusing on primary care and emergency department
physicians. The challenge of controlling and further growing an
expanding physician base that was only one-tenth this size just two
years ago is formidable. This challenge is further compounded as many
of its physician practices, which were previously unprofitable, have
yet to be fully integrated. Indeed, new management was brought on
largely to address this concern following the company's posting of weak operating performance in 1997. The company needs to develop increased information system capabilities in its practices, since risk-sharing payment methodologies are becoming an increasingly important source of reimbursement. In addition, the acceptance of risk sharing arrangements, such as global capitation, also exposes the company to enrollee costs outside of its direct control.
Still, the company has gained important positions and critical mass in
several local markets. The company has successfully leveraged these
positions in gaining both local and national managed care contracts.
These contracts provide access to more than 12 million managed care
enrollees. The further leveraging of the companies' resources,
including rationalization of physician locations, more efficient
acquisition of practices and, longer-term, medical management, provide
an offset to continued reimbursement and competitive pressures.
Financialy, Standard & Poor's expects funds from operations to
lease-adjusted debt to approximate 12%.
OUTLOOK: STABLE
The rating is expected to remain unchanged as the company adjusts its
focus to managing and integrating its currently owned practices, versus its former emphasis on rapid expansion through acquisition, Standard & Poor's said. -- CreditWire |
