Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (11) | Ignore Thread Prev Thread | Next Thread
Author: solberg Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 40  
Subject: Still a good buy? Date: 12/10/1997 8:23 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
Okay, I began watching this stock when it's earnings announcement made it fall through my Foolish Analysis screen. Since I have been watching it, the damn stock has risen 15%. It has risen even on days that the market has fallen (like today). Today it closed at 20. Now I am concerned that it might be too high to be worth buying. It seems like the historical pattern is to go to about 21 and then drop (precipitously) back to the mid-teens.

According to my rough calculations, the PEG is about .90, the YPEG is about .85 and the DPEG is about .78.

What do you think? Is it still a reasonable price?

Thanks,
- Andy
Print the post Back To Top
Author: MichiganNative One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 24 of 40
Subject: Re: Still a good buy? Date: 12/11/1997 8:54 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
Andy...you mention historical pattern. UPUP has only been on the charts a little over 1 year. I don't think that's long enough to have formed a "historical pattern".

UPUP rose very quickly a few months ago and then dropped back somewhat. A slower more consistent rise, which seems to be happening now, is much more desirable. As to whether it is still a good buy, I think so. But then...I am NO expert.

Print the post Back To Top
Author: grider One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 25 of 40
Subject: Re: Still a good buy? Date: 12/11/1997 9:55 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
I would be intrested to see what figures you used to get those calculations. With Current estimates of $1.25 and foward estimates of $1.55, with a projected growth rate of 15% a year (very conservative by my estiamtes) at a current price of $20/share I come up with these figues:

peg of .66 which is reasonable not underpriced.
and a ypeg of 1.06 which suggests that the company may have temporarily exceeded its projected growth expectations. The key word's here are temporarily and projected. If the facts change estimates change. Currently the risk/reward ratio under these circumstances is not that great from my perspective. I still own the company and don't plan to sell any time soon but I believe that there are many other greater opportunities out there today. The hard thing is to find them and wait.

grider



Print the post Back To Top
Author: solberg Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26 of 40
Subject: Re: Still a good buy? Date: 12/12/1997 7:56 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
As I said in the original post, the PEG etc. were approximate. Here are the data I used:

Current EPS 1.06
One Year EPS 1.23
Two Year EPS 1.55
5 Year growth: 19
PE 14.8

I got all of the information but the 5 year growth off of the Foolish Snapshot. The 5 year growth rate is from Zack's. Comments?

Best,
- Andy

Print the post Back To Top
Author: MichiganNative One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 27 of 40
Subject: Re: Still a good buy? Date: 12/12/1997 8:06 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
No matter what kind of in-depth analysis you use, it isn't written in stone, but one thing is sure...no matter what the rest of the economy does, people are still going to require health care and food.

I believe those two areas are more promising than anything else right now.

Print the post Back To Top
Author: solberg Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 28 of 40
Subject: Re: Still a good buy? Date: 12/12/1997 10:42 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0

> Subject: Re: Still a good buy?
> Author: MichiganNative Date: 12/12/97 8:06:17 PM (ET)
> No matter what kind of in-depth analysis you use, it
> isn't written in stone, but one thing is sure...no
> matter what the rest of the economy does, people are
> still going to require health care and food.

> I believe those two areas are more promising than
> anything else right now.

I appreciate your response, but I have to disagree. I do strategic planning for health care facilities for a living and have been in the field for more than 20 years. I think that you have to be VERY careful right now in this field. Managed care firms have been subscribing the healthy (for the most part). HMOs are just getting experience with Medicare and Medicaid and, as recent experience has shown, it is a risky venture for them. Physician groups are gaining and losing contracts on a daily basis. Hospital chains are feeling the backlash of having been too proprietary. Long term care chains are finding it harder to maintain margins in the face of lower Medicaid and Medicare reimbursement, as they lose private pay residents to assisted living (where they have to charge less in order to be competetive). Don't oversimplify healthcare. As in any industry, you have to find the good companies.

Just some foolish thoughts.

Best,
- Andy

Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post Back To Top
Author: solberg Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 29 of 40
Subject: Re: Still a good buy? Date: 12/12/1997 10:48 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0

> Subject: Re: Still a good buy?
> Author: MichiganNative Date: 12/12/97 8:06:17 PM (ET)
> No matter what kind of in-depth analysis you use, it
> isn't written in stone, but one thing is sure...no
> matter what the rest of the economy does, people are
> still going to require health care and food.

> I believe those two areas are more promising than
> anything else right now.

I appreciate your response, but I have to disagree. I do strategic planning for health care facilities for a living and have been in the field for more than 20 years. I think that you have to be VERY careful right now in this field. Managed care firms have been subscribing the healthy (for the most part). HMOs are just getting experience with Medicare and Medicaid and, as recent experience has shown, it is a risky venture for them. Physician groups are gaining and losing contracts on a daily basis. Hospital chains are feeling the backlash of having been too proprietary. Long term care chains are finding it harder to maintain margins in the face of lower Medicaid and Medicare reimbursement, as they lose private pay residents to assisted living (where they have to charge less in order to be competetive). Don't oversimplify healthcare. As in any industry, you have to find the good companies.

Just some foolish thoughts.

Best,
- Andy

Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post Back To Top
Author: solberg Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 30 of 40
Subject: Re: Still a good buy? Date: 12/12/1997 10:50 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0

> Subject: Re: Still a good buy?
> Author: MichiganNative Date: 12/12/97 8:06:17 PM (ET)
> No matter what kind of in-depth analysis you use, it
> isn't written in stone, but one thing is sure...no
> matter what the rest of the economy does, people are
> still going to require health care and food.

> I believe those two areas are more promising than
> anything else right now.

I appreciate your response, but I have to disagree. I do strategic planning for health care facilities for a living and have been in the field for more than 20 years. I think that you have to be VERY careful right now in this field. Managed care firms have been subscribing the healthy (for the most part). HMOs are just getting experience with Medicare and Medicaid and, as recent experience has shown, it is a risky venture for them. Physician groups are gaining and losing contracts on a daily basis. Hospital chains are feeling the backlash of having been too proprietary. Long term care chains are finding it harder to maintain margins in the face of lower Medicaid and Medicare reimbursement, as they lose private pay residents to assisted living (where they have to charge less in order to be competetive). Don't oversimplify healthcare. As in any industry, you have to find the good companies.

Just some foolish thoughts.

Best,
- Andy

Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post Back To Top
Author: solberg Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 31 of 40
Subject: Re: Still a good buy? Date: 12/12/1997 11:10 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0

> Subject: Re: Still a good buy?
> Author: MichiganNative Date: 12/12/97 8:06:17 PM (ET)
> No matter what kind of in-depth analysis you use, it
> isn't written in stone, but one thing is sure...no
> matter what the rest of the economy does, people are
> still going to require health care and food.

> I believe those two areas are more promising than
> anything else right now.

I appreciate your response, but I have to disagree. I do strategic planning for health care facilities for a living and have been in the field for more than 20 years. I think that you have to be VERY careful right now in this field. Managed care firms have been subscribing the healthy (for the most part). HMOs are just getting experience with Medicare and Medicaid and, as recent experience has shown, it is a risky venture for them. Physician groups are gaining and losing contracts on a daily basis. Hospital chains are feeling the backlash of having been too proprietary. Long term care chains are finding it harder to maintain margins in the face of lower Medicaid and Medicare reimbursement, as they lose private pay residents to assisted living (where they have to charge less in order to be competetive). Don't oversimplify healthcare. As in any industry, you have to find the good companies.

Just some foolish thoughts.

Best,
- Andy

Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post Back To Top
Author: MichiganNative One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 33 of 40
Subject: Re: Still a good buy? Date: 12/13/1997 2:51 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
Thanks for the input, Andy. You are right, I did oversimplify. I do realize the problems you mentioned that exist in the healthcare industry. There are even more, such as the dishonest practices that take place.

Do you think an intermediary, ie; UPUP is in a slightly more secure position than a health care provider would be or is the ground under them just as shaky? Although I own shares of UPUP I have no intention of buying more. As Grider mentioned, it is just a part of what I hope is a fairly well balanced portfolio.





Print the post Back To Top
Author: solberg Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 34 of 40
Subject: Re: Still a good buy? Date: 12/13/1997 8:23 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
>> Thanks for the input, Andy. You are right, I did oversimplify. I do realize the problems you
mentioned that exist in the healthcare industry. There are even more, such as the dishonest practices
that take place.

Do you think an intermediary, ie; UPUP is in a slightly more secure position than a health care
provider would be or is the ground under them just as shaky? Although I own shares of UPUP I
have no intention of buying more. As Grider mentioned, it is just a part of what I hope is a fairly well
balanced portfolio.<<

My only problem with UPUP is that I watched it too long and missed the 15% swing. UPUP appears to be a well run intermediary. I think UPUP is going to have to compete over the longer term more and more with managed care companies or other insurers who want to do it themselves and offer the Docs an incentive to go with them. But for now, I think that UPUP is on the right path. They are clearly offering a service that is in demand. Apparently the market thinks so, since the damn price just won't go down lately, ha, ha.

Best,

- Andy

Print the post Back To Top
UnThreaded | Threaded | Whole Thread (11) | Ignore Thread Prev Thread | Next Thread
Advertisement