To OTC Journal Members:
 

Breaking News on MedGrup (OTC BB: CODX)

In the microcap arena MedGrup is one of our primary choices. Prior to the bear market of 2000 we felt the stock was worth $6 per share based on growth rate and profitability. Even In this environment of stingy values we still feel the stock is worth $4 per share today. Having closed at $1.75 on Friday, investors at these levels would enjoy a 130% return on their investment if we are right. 

Health Care related stocks behaved very well during last year's tech wreck, and MedGrup should be pulled up along with the rest of the group in the foreseeable future.

MedGrup provides outsourced Coding services to hospitals and clinics. There is a chart created for every patient that gets health care regardless of whether the services are at a hospital, clinic, or doctor's office. 

After the health care services are rendered the patient's chart ends up in the hands of a professional "CODER" who assigns a specific code associated with the treatment. That Code is the basis for reimbursement from Medicare, Medicaid, or the Insurance Provider. 

A practice referred to as UpCoding has been the source of hundreds of fines and prosecutions levied on health care providers by the HFCA. The fines have been so extensive and painful to the health care providers that the practice of DownCoding is now commonplace in order to avoid any hint impropriety. 

MedGrup has been profitable since 1997 and has doubled in size every year since it opened it doors. Year 2000 revenues will probably come in about $4, and their 100% annual growth rate could accelerate in 2001. They recently brought in new management, new infrastructure, and new technology. 

MedGrup currently services about 75 hospitals. We expect that number to grow considerably in 2001. In October, MedGrup announced an agreement with the Dallas/Ft. Worth Hospital council to become a preferred provider to its 83 hospital organization. 

On January 12th MedGrup announced a similar agreement with VHA Southwest, an organization with 83 more hospitals. Between the two announcements, MedGrup has the potential to expand its customer base by over 160 new hospitals.

On January 17th MedGrup announced two contract signings with hospitals from the Dallas/Ft. Worth organization. The stock traded briefly up to $3.25 on that news.

This morning the company announced its first two contract signings from the VHA Southwest group, which strengths our belief that the company should see a significant acceleration into the $.15 to $.20 EPS range, or even higher on double Year 2000 sales.

Management informs us the Year 2000 audited numbers will be released next week. We will have a comprehensive update on the achievements from Year 2000 and an outlook for 2001 in a comprehensive edition next week.

Here is the complete text of the news release for your review:
 

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