I think that CCGI has things moving in the right direction. When we see the actual completion of the stock issuances in the subsidiaries we'll get a better picture of the value here. CCGI indicated that this would be happening pretty soon. I am told that these subsidiareies will be fully reporting frm day 1.
I spoke with Jim Thuney of CCGI a couple times over the last several weeks. The sale of home health care assets fo $5MM seems a good one--they are using most of that cash to acquire the MSO assets, which are growing faster (about 20% vs. 5%). They have more acquisitions lined up in all the subs.
I am enthused about CCGI but see three negatives:
--still need to work through about $135,000 in floorless convertibles (issed under prior management). This is a struggle, with Jim refusing to take the entire hit all at once and, essentially, doling these shares out gradually. However, as long as stock can be bought 25% below the bid and then dumped we won't go anyhere.
--the financial structure is complex, and somewhat fluid. Getting the stock issued in the subsidiaries, and the financial statements needed to get those prospecti complete and the stock issued, will greatly facilitate this--we should end up wth a chart that looks kind olike an org chart which reads 'entity x, owned 80% by CCGI, has n million shares out and trades at $y", etc. Coming up with a value once this is in place is pretty straightfowad math.
--the value (both assets and income streams) in CCGI is in the subsidiaries. Until we see a public valuation of those operations via the offerngs, it is relly hard to say what the assets are worth. There obviously is some considerable value -- as a for instance the home health care assets fetched $5MM--or about .25 per share, which is not at all shabby for a company trading at .30. This looks even better when one considers that the home health care division was something of a weak sister imho.
I think the asset value is well above the .30 per share current price. We'll also see earnings reported soon-I expect they will look pretty good considering they will only report earnings from the acquistions from the time the deals closed. If you annualize the last quarter numbers a truer, and more rosy, picture of what we might expect going forward will emerge than if one just looks at the numbers s reported.
I plan to add to my position on weakness, and to monitor the redemptions of that convertible. CCGI announced a new PR firm (paid in cash, I believe, not stock--but don't quote me on that) which signifies they are going to try to get the message out. I suspect they will have a much better and clearer story to tell once the subsidiaries have issued their stock--not sure it is worth trying to get PR out before then but am glad to see they have the team in place so that that news can be widely communicated when available. |
