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Biotech / Medical : AHTC Corp (AHTC)-formerly Advanced Health (ADVH) -- Ignore unavailable to you. Want to Upgrade?

To: Dennis Giasi who wrote (86)	3/23/1998 4:28:00 PM
From: Tom D	Read Replies (2) \| Respond to of 371

Why is the P/E so much less than the growth rate? The low P/E is attractive, but it makes one wonder if there is something wrong with this company--or does it just lack momentum? The only negatives I know are 1) the concern about earnings "quality" and 2) the concern that ADVH is somehow being investigated by the FBI, SEC, CIA etc. due to mob ties. When H&Q put out a strong buy on the stock on January 5, 1998, they mentioned concern number one (see my post #22), although their analysts did not think this was a significant concern. Incidentally, you can buy this H&Q analyst report for $50 from investools.com. Do a search for information about ADVH, and then go to the Multex reports. $50 seems like a lot of money, but it is a 12 page report, is very thorough, and, how much do you have at stake in this company? You know as much as I do about concern #2. I see concern #2 as a buying opportunity. My opinion is that this stock is so cheap that there is not much downside left. I am very optimistic about their ability to continue to produce upside earnings surprises. HCFA likes to see Medicare recipients in HMO's, since HCFA costs are, by definition, 5% less than Medicare fee-for-service costs in each respective county. One might worry that HCFA would start squeezing docs in the Medicare HMO's, but the opposite is happening. HCFA is increasing the Medicare fee-for-service sector's reimbursement documentation requirements dramatically starting July 1, 1998. The master plan appears to be to get more docs to move their patients into Medicare HMO's. Medicare HMO global risk contracting is a major source of global risk revenue for ADVH; this appears to be a sustainable source of revenue growth for ADVH looking a few years ahead. Overall, in the Northeast, HMO penetration is thought to be only 20% to 30% of patients. These markets are immature. As managed care penetration increases, more physicians are coming to realize that they can't make it as solo practitioners or small groups. They will need ADVH's expertise to survive. If I had any money for investments, I would buy ADVH. I tried to talk my wife into buying 1000 shares. But she is a wise lady, and reminds me not to invest money that I cannot afford to lose. Until I dig my way out of debt, I will sit on the sidelines. Hope this is helpful. Best Regards, Tom D