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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Thomas Haegin who wrote (2708)	12/9/1997 9:08:00 PM
From: jeffbas	Read Replies (1) \| Respond to of 78555

I will address your question as best as I can. There is a long history in the Multiple Employer Trust (MET) market of very loose affinity groups being set up by shady characters who charge too low rates and set up too low reserves. Huge volumes of business get written before they get caught. These kinds of outfits usually go out of business, only to appear under some other name somewhere else. I believe that OXHP is a real company that (based only on reading the thread) has doctor/supplier networks that patients like. They have an advantage of size that their competitors do not. Assuming that they do not pay their networks much different amounts than their peers, they should be able, with competent mgmt and actuarial staff, to develop a pricing structure that is higher than they now charge but still less than their peers. They need to also do some intelligent damage control to help retain existing customers and do the best they can with new ones (as I noted on OXHP thread). If the premises in the preceeding paragraph are correct, which they may not be, and if mgmt executes well (a tough assumption to make under the circumstances), and was just stupid (not crooked), I would expect the company to survive. It might well be a smaller company, depending on how many customers are moved by brokers/consultants and how much new business falls off. I doubt that OXHP would make over $1 per share any time soon (unless they overstated the reserve increase and feed back the eventual excess into earnings) or carry a rich P/E. I also am skeptical that anyone would be interested in buying the business at this time, when I would consider it to be unstable.

To: Thomas Haegin who wrote (2708)	12/10/1997 12:14:00 AM
From: James Clarke	Read Replies (1) \| Respond to of 78555

Chapter 11 for Oxford? Let me go out on a limb and just speculate that the company, however unpopular, is not going to go bankrupt SINCE IT DOESN'T HAVE ANY DEBT. Another reality check. You don't scare a value investor off by pointing out that a stock that has fallen from 80 and change to 20 in two months has some serious flaws. I don't want to ruin the family tone of this site, but my verbal response would be "No s__t" (sorry Mike) Reading between the lines of the Wall Street Journal article the other day, I saw that they are still retaining customers. Thats what matters to me. I'm not betting that earnings are going to meet the old Wall Street estimates. I'm just betting that the franchise is still somewhat intact. I'm not going to promise anything or mortgage the house to buy more of Oxford, but this has every characteristic of a winning value investment. If they can't capitalize on their East Coast franchise because they can't work a computer, Pacificare or Aetna will be happy to do it for them. OK, I'm testy. I lost money today... BTW, take a good look at U.S. Can (USC). Its cheap and has a very clear catalyst. I'll post more later.