Email : info@otcjournal.com
URL : http://www.otcjournal.com
To
OTC Journal Members:
Special Announcement:
We will be releasing our new profile on an XML company this Friday
after the market closes.
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Energy Power
Systems (OTC BB: EYPSF) Update |
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Smokin!!-
UP 100% in the last week and trading at $3!!! Congratulations
to those members that took our advice and accumulated this stock. You are
probably making an outstanding return right now, and hopefully we will
see the stock higher.
As mentioned in earlier editions,
we always felt a good target for this stock is about $5.50 based
on 2.8x book value, the industry average. Traders might wish to take a
little money off the table on this big surge, but the stock could definitely
go higher in the short term.
Next step- management informs
us the $3 price qualifies the company to apply for a listing in the American
Stock Exchange, which they intend to pursue. Stay tuned for further
updates.
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MedGrup
Corporation (OTC BB: CODX) Releases Year End Results |
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Today, just prior to the market opening,
another one of our featured stocks for 2001 came out with outstanding news.
MedGrup
released operating results right in line with our expectations, and is
currently on track to duplicate this outstanding growth rate in 2001.
Even in today's depressed market
environment we continue to believe MedGrup is worth at least $4
a share based on trailing earnings, growth rate and industry group.
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 results are in line with past performance, and are as follows:
-
Revenue increased 90%
to $3,895,712 for the year ending December 31, 2000, up from $2,054,562
for the year ending December 31, 1999.
-
Net Income Increased 83% to
$424,905 (2000) from $231,650 (1999).
-
EPS increased to $.08 from $.05
on 6.1 million shares vs 4.9 million shares.
The percentage increase in profit margins
felt just short of the increase in revenues due to the large number of
new coders the company is currently training to fill the increasing demand
for its services.
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Valuation |
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While technology stocks continue
to be in the toilet, stocks of health care related companies continue to
trade well. HMO's were one of the few groups that traded well in
2000, and continue to do well in spite of the NASDAQ bear market.
One of the oldest formulas for valuing
a stock based on earnings relies on the precept that stocks should trade
at a PE Ratio (Price to Earnings) which is 50% of the company's growth
rate.
MedGrup is growing at approximately
100% annually. Therefore, according to this formula the PE of the stock
would be 50 if the stock were fully valued.
If the stock were trading with
a PE of 50, the stock would be at $4 (50 times $.08 per share).
At $4, this stock would be 77% higher than yesterday's
closing price.
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Looking
Forward |
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We are only a couple of days away
from the end of the 1st Quarter. The company informs us the 1st quarter
will show the best revenues in their history. In about one month we will
have 1st quarter results to review. Two major new contracts have been announced
this year.
The service they provide to health
care providers reduces costs and makes them more profitable. In any economic
environment this is a service health care providers will use. This company
will continue to grow, and sooner or later the stock will get some recognition.
Accumulate this stock with a $4 price target. Then you can
re-evaluate based on the company's corporate performance.
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Special
Note on Envoy Communications (NASDAQ: ECGI) |
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Those of you who have been following
this stock know that it has inexplicably dropped from the $3.50 range
to $2 in the last thirty days. The stock has begun to rebound on
light volume.
The unsubstantiated rumor we have
heard was a fund manager was forced to liquidate his one million share
position with an April 1st deadline. This is the type of market that creates
opportunities of this type. We have heard this fund manager has now sold
the entire block. A quick look at the recent trading history leads us to
believe this stock was all purchased in the $2 to $2.25 range on several
high volume days, and the stock is now behaving much better.
This is a bargain basement steal
under $3. Accumulate.
Here is the complete press release
from MedGrup (OTC BB: CODX) For Your Review:
Wednesday March 28, 7:01 am Eastern
Time
Press Release
SOURCE: MedGrup Corporation
MedGrup Corporation Announces
Year End Results, Continues Impressive Sales and Growth Momentum
MONUMENT, Colo., March 28 /PRNewswire/
-- MedGrup Corporation (OTC Bulletin Board: CODX - news) today announced
its financial results for the year ending December 31, 2000. Revenue increased
90% from $2,054,562 for the year ending December 31, 1999 to $3,895,712
for the year ending December 31, 2000. Net Income Increased 83% from $231,650
to $424, 905 or from .05 cents per share to .08 cents per share. This increase
occurred while the company substantially increased its infrastructure to
insure its ability to grow. The company also set aside $165,733 for future
income tax expenses. Earnings per share were calculated based on 6,129,673
shares outstanding at December 31,2000 as compared to 4,907,917 at December
31, 1999. Working Capital increased $725,201 over December 31, 1999, to
$1,287,181 at December 31, 2000 from $561,980 at the same date in 1999.
Shareholders equity increased from $811,088 to $1,774,716. Increased revenues
were due solely to increases in the companies coding and related revenues.
For the Year Ended December 31,
2000
1999
Revenues
$3,895,712 $2,054,562
Cost
of Revenue
1,635,753 809,723
General
& Administrative Expenses 1,615,145
990,223
Operating Income
644,814 254,616
Non Operating
Income (Expense)
4,057 -13,412
Net Income Before
Taxes
648,871 241,204
Income Taxes
Current
Tax Expense
-58,233 -507
Deferred
Tax Expense
-165,733 -9,047
Net Income
$424,905 $231,650
The foregoing may contain statements
that plan for or anticipate the future. Forward-looking statements include
statements about the future of the medical services industry, statements
about our future business plans and strategies, statements about our financial
condition and results of operation and most other statements that are not
historical in nature. Forward-looking statements are generally identified
by the words ``anticipate,'' ``plan,'' ``believe,'' ``expect,'' ``estimate,''
and the like. Because forward-looking statements involve future risks and
uncertainties, there are factors that could cause actual results to differ
materially from those expressed or implied. These factors include general
economic and business conditions affecting the medical services industry,
financial strength of the public and private healthcare system, government
regulation or legislation, the costs and pricing of our services and the
level of demand for our services. Investors should not rely on these forward-looking
statements.
For further information contact:
MedGrup Corporation, Investor Relations, (719) 481-1500.
SOURCE: MedGrup Corporation |
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