Novacare (NOV) breaking out... Message Board

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Biotech / Medical : Novacare (NOV) breaking out...

NOV 15.67

+0.8%

Dec 19 9:30 AM EST

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To: Sigmund who wrote (288)	6/4/1998 10:26:00 AM
From: Todd D. Wiener	Read Replies (3) of 420

I spoke to Susan Campbell at NOV. The rumors are false, and business in the 4th quarter is good. The stock is trading in sympathy with nursing home stocks, as well as a general dislike for healthcare services and small-cap stocks. NCES is also doing well this quarter. The growth in NOV's debt is not a concern. In fact, the company has wanted to increase its debt to approximately 50% of total capitalization. Within the next 6 months, NOV expects to have plans for a capital refunding, such as replacing higher interest debt with convertible debt or preferred stock. NOV is looking at all options. While NCES is currently making acquisitions with mostly stock, NOV is making acquisitions with little or no stock, due to the low price. I asked at what price the stock would have to trade for stock acquisitions to resume. The answer was "the high teens." This seems to indicate that the company believes the stock should be trading at a low-mid 20s P/E. I agree with that. Todd

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