To: Tom D who wrote (185 ) 5/25/1998 10:49:00 PM From: Tom D Read Replies (2) | Respond to of 371
A stellar posting from the Yahoo boards.... "I have owned ADVH stock for several months and have followed this board every day and have also read all other news articles and other papers. From a combination of this info. I offer the following as reasons why ADVH is trading at 14: 1. There is a very large short interest. April's report showed 2.5m shares sold short out of total 6m, over 40%. When I discussed this with ADVH IR we agreed this was a problem to share price in the short term. Also, that the short interest grew in the time frame of the NYO stories. 2. The whole healthcare industry has been in trouble. The leading companies are not doing well (unlike ADVH), for example FPAM which has gone from 40 to 3 due to poor performance. Also, some of these companies(unlike ADVH) have received bad publicity related to ethics and crooked accounting, for example Columbia Healthcare and Oxford. 3. An inaccurate but damaging article, two of them, in the NYO. This may have scared some investors, given that others in this sector, like Columbia and Oxford, had some crooked accounting. 4. A growing young company that is not well known, yet. Especially not know is that the business model is unlike FPAM and others. 5. A small downgrade by H&Q, perhaps because of a temporary growth in Receivables or because Richard Lee of H&Q had projected earnings of $1.50 in 1999 and recently management gave guidance on this for the first time of $1.43. These are, I believe, some of the reasons that the stock is currently trading at 14. However, like a previous post said about a volcano, and I like to relate it to a can of Coke. Shake the can of coke and then open it and it will come blowing out of the can with a vengeance. Soon, investors will see: 1. The NYO stories are untrue. 2. ADVH is making money, doubling sales, EPS growth of over 30%, even with the lesser $1.43. 3. An innovative company, with the two internet patents. IR advised me that ADVH is working on quantifying the value of these patents and will soon publish a news report. I suggested that in addition to the value of the 2 billion prescriptions that they keep in mind the value of improving the quality of the prescriptions and possibly avoiding fatal errors in the prescriptions. 4. That the Receivables problem is going away and in fact only occurred because of significant increase in sales that were booked close to the end of the quarter and they simply had not had an opportunity to collect yet. 5. ADVH is making acquisitions and growing sales and earnings. Already ADVH has blown away Wall Street's expectations of physicians under management for all of 1998. And, we still have 7 months left. 6. Other companies in this sector are being significantly downgraded. ADVH is not, in fact, other than the very small change from strong buy to buy by H&Q, ADVH continues to have Strong Buy and Buy. IN my humble opinion, we are sitting on a gold mine and I have observed the practices of shorts for some time now. Very clever at provoking fear to get longs to sell. When we sell then the price stays low and the shorts make money. If we do not sell we will break beyond the influence of the short eventually as more buyers enter the picture. Eventually, the shorts will cover and the price will blow through to Riley's expectations." Thanks to micajus, Tom D