Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Biotech / Medical : Novacare (NOV) breaking out... -- Ignore unavailable to you. Want to Upgrade?

To: Todd D. Wiener who wrote (303)	6/19/1998 11:34:00 PM
From: Sigmund	Respond to of 420

Interesting that the stock went up for a few days before the update was released and then dropped on the day the update was released. I assume that some knew about the update before others.

To: Todd D. Wiener who wrote (303)	6/21/1998 10:56:00 PM
From: Kelvin Taylor	Read Replies (1) \| Respond to of 420

Todd- Here is the June 6 evaluation for NOV from S&P. S&P OPINION: Accumulate(****) Quantitative Evaluation: Outlook (1 Lowest - 5 Highest): 5- Fair Market Value: $15.60 Risk: MEDIUM Overview 19-MAY-98 We look for top-line growth in excess of 50% in FY 98 (Jun.), as steady gains in the rehabilitation segment are augmented by sharply higher revenues from the employee services unit. About half of the expected growth should come from acquisitions; during the first nine months of the year, NOV acquired 33 outpatient rehabilitation facilities, 29 orthotic/prosthetic facilities and four professional employer organizations (PEOs). Changes to the way Medicare reimburses nursing homes, including the payment of a single all-inclusive per diem payment rather than a cost-plus payment, will result in some pricing and utilization pressures within the contract therapy segment. However, a focus on lowering operating expenses and restructuring the therapy services delivery model has reduced the company's cost of providing services. The 72% owned PEO unit will provide a substantial boost to both revenues and earnings. Valuation 6-June-98 Recent weakness in the stock is viewed as a buying opportunity and we maintain an accumulate for outsized gains over the coming six to nine month period. Aside from the company's own fundamental merits, we believe the stock may benefit from takeover speculation amid ongoing merger and acquisition activity within the long term healthcare segment. Absent such a development, the shares should benefit as NOV begins to post results subsequent to the enactment of the new Medicare reimbursement regulations. Excluding a $0.35 gain on the sale of a 28% interest in NovaCare Employee Services Inc., along with a restructuring charge of $0.21, we see FY 98 (Jun.) EPS of $0.77 and look for a 17% rise in FY 99 to $0.90. Kelvin