Email : info@otcjournal.com
URL : http://www.otcjournal.com
To
OTC Journal Members:
Our previously announced Trading
Alert for today has been put on hold subject to market conditions. The
NASDAQ had three strong days in a row from Tuesday through Thursday,
and today traded flat. We haven't seen three up days in a row since August.
Odds are that a short term pullback is imminent.
The stock we had in mind ran up in
conjunction with the market, and we felt the entry point was high risk
after this week's rebound. We will bring it to you when the timing is better.
As we were contemplating the subject
for the weekend edition we got a call from our friends at MedGrup (OTC
BB: CODX). They had a press release scheduled for next week, but we
got them to issue it today after the close so that members of the OTC
Journal could get the first look at this piece of news before the market
re-opens on Tuesday morning. We find it compelling and it reinforces our
view that MedGrup will once again double in size in 2001, as the
company has done each of the last three years.
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News From MedGrup
(OTC BB: CODX) |
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In the microcap arena MedGrup
is our number one choice for a big winner in 2001. 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 $1.50 today, investors
at these levels would enjoy a 266% 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. They are on track for $4 million in revenues in 2000,
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.
Today just after the market closed
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.
In an interview today management
indicated that new contract signings were just around the corner.
The company should earn $.08 to $.10
per share in 2000. 2001 could see a significant acceleration into the $.15
to $.20 range, or even higher.
Here is the complete text of the
news release for your review:
Friday January 12, 9:00 am Eastern
Time
Press Release
SOURCE: MedGrup Corporation; VHA
Southwest, Inc
MedGrup Corporation Announces
Agreement With VHA Southwest To Offer Coding Services to Its 83 Member
Hospitals
MONUMENT, Colo., Jan. 12 /PRNewswire/
-- MedGrup Corporation (OTC Bulletin Board: CODX - news) today announced
that it has signed a ``preferred vendor'' agreement with VHA Southwest,
Inc (Southwest). Southwest, located in Dallas, is a Regional Health Care
System of VHA, Inc. One of Southwest's objectives is to provide due-diligence
on vendors, and buying power benefits to its members. The agreement marks
MedGrup Corporation's second contractual endorsement from a major hospital
consortium.
Under the agreement, Southwest will
recommend and promote MedGrup's coding and consulting services to its 23
partner organizations representing 83 acute care hospitals. As part of
the agreement, MedGrup will provide the member hospitals a no-charge review
of inpatient, outpatient, and ER coding. The objective of the reviews is
to ensure compliance with HCFA rules and regulations and to ensure that
all legitimate revenue is being realized for their medical services.
Edwin Wales, Senior Vice President
of Contract Sales for Southwest commented, ``MedGrup has been performing
outsource coding services for some of our member hospitals for several
years and, because of MedGrup's successful bottom-line performance, those
member hospitals were instrumental in helping us with the due diligence
and approval process.'' ``Additionally, as we look forward to complying
with recently mandated HIPAA privacy rules for patient information, we
have gained a comfort level with MedGrup's proprietary Code@Home process
to automate the transport and accountability of medical records in a secure
manner.''
MedGrup Corporation, the industry
pioneer of off-site coding services, is engaged in the highly specialized
business of coding inpatient, outpatient, and emergency room medical charts.
MedGrup's services include both backlog and concurrent coding services.
The Company offers health care providers a customized high quality outsourcing
alternative to in-house coding of medical records, often resulting in increased
revenue for its client hospitals. MedGrup also provides consulting services
to health care providers in the business office and medical records departments.
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, please contact
Terry Holmes, President of MedGrup Corporation, 719-481-1500, or Edwin
Wales, Senior VP of VHA Southwest, Inc, 972-866-7400.
SOURCE: MedGrup Corporation; VHA
Southwest, Inc |
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