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I have been looking at this stock for a while and wonder if anyone has any insights into the company. As far as I can see, things look pretty decent. The company provides rehabilitation therapists to hospitals -- an outsourcer, if you will, for that service. RHBC has a presence in all 50 states, but I do not know their share of the rehabilitation market. That business seems to be in line with the well-known demographic trends brought on by the baby boomers (meaning that I expect that RHBC will have plenty of business providing physical therapy to boomers with broken hips, surgery recovery needs, etc, for many years to come). I have a few numbers that seem interesting that I will try to summarize below Year PE Price/Book Price/Sales EPS Hi Lo Hi Lo Hi Lo 92 20 10 3.7 1.9 0.8 0.4 0.63 93 21 10 0.8 0.4 0.73 94 21 12 2.6 1.7 0.9 0.5 0.88 95 17 10 2.8 1.5 1.0 0.5 1.05 96 19 11 2.0 1.3 0.9 0.6 1.39 97 25 13 3.3 1.6 1.4 0.6 1.94e 98 2.27e Based on current price of 29, the following are some of the basic numbers. PE(TTM) 17 PE (e97) 15 PE (e98) 13 Price/Cash Flow 13.0 Price/Book 2.5 Price/Sales 1.0 In April, MF ran a very positive report on "Stocks to Love" in which one of the fools picked RHBC. It is decent reading if you are interested in this co. Based on consensus estimates, RHBC is growing its bottom line at 21%, 19%, 32%, 40%, 17%, year over year, beginning with 1994 numbers. The predicted drop off from 40% to 17% is something I have not yet been able to explain. In addition, the company recently released a statement saying that the recent congressional changes to health care policies are "supported by the company" and, in another section, said to be in line with the company's outsource concept. This may alter the predicted earnings somewhat, but I have not seen this yet. I believe that the estimates derive from the predictions of 4 analysts, but I do not know which firms follow the company. Volume is usually painfully low (<100K shares / day), but if Peter Lynch is right and earnings drive prices over the long haul, this company seems something that has been overlooked. I do not know the institutional ownership numbers. Just using an average high PE of 21 and average low PE of 15, it looks as though it would be reasonable to expect that a reachable high price for 97 could be as high as 41 (using estimated earnings). The low by the same method is just about what it is now, 29. For 98, these same figures reach a high of 47, with a low of about 34. I don't mean to say that these are predictions, just rough guides that I personally use to get a rough order of magnitude of reasonable possibilities. I usally like to try to find some way to try to look a little farther out, say, 4 to 5 years. My goal is to at least double my dollars in that span. From here it looks mighty do-able. I would love to have comments especially if you know the answers to any of my 'unknowns' above. Regards, J | ||||||||||||||
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