Glen Doth Know

Good Day,

I looked into this back in December too.

Back when it was below $1.

Thought it was a steal. http://www.divguy.com/2007/10/safe-dividend-stocks.html

http://www.glenbradford.com/blog/archive/2008_11_01_archive.html

I listened to conference calls, read the reports, did the research. But, none of the professors at Purdue really were able to answer my questions --- I didn't have the time and they didn't have the time. As I recall, I was very concerned about the negative shareholder equity. I was scared out of something I semi-understood and definately-believed in. *Mental Note*

So, I missed out on 1000%. Won’t be the first time. Damn that sucks.

What do we do with PRSC now?

Well, I wouldn’t buy it now. It’s too expensive (that means less reward and more risk to me) than other companies I’m looking at. Forward P/E of about 10 based on what I can tell. The upside is only 200% from this point. I'm a go big kind of guy. I do my best to eliminate the risk of going home empty handed.

Nicola, thanks for bringing this to my attention. Even though I missed out, it’s good to know that I was right on this one. Learn from your mistakes.

Glen

From: Nicola Vallieri [mailto:n.vallie
Sent: Monday, May 25, 2009 8:45 AM
To: gbradfo
Subject: Stock tip

Dear Glen,
I am still invested with most of my holding into PRSC which I am going to keep on holding for another year but I'd like your opinion about it.
PRSC was a real stock from "Providence" to me. I went all-in in early november after months of real blood bath, where I lost 3/4th of my initial capital. I bought the same day Obama won the election for the following reason: US government can't provide health service to everybody on its own. Moreover PRSC comes 1/3th of its business from states, which suddenly became nasty payers, causing a spiraling falling down of the PPS. I trusted the management when they said there was no problem with the debt convenants (see bk) and I was right. PRSC was the first company to exit the crises topping the russell 3000 index during the first quarter of this year. Looking forward I am confident PRSC will be the first company to regain its pre-crises value around 30$ cause growth is already there although it is still not so evident since the management decided to not pubblish their 2009 EPS guidance yet.
Anyway since I'm an engineer and I'm used to crunch numbers I tried to perform my own guidance with the data I got in early april. The result is the following:

http://messages.finance.yahoo.com/Business_%26_Finance/Investments/Stocks_(A_to_Z)/Stocks_P/threadview?bn=25927&tid=2014&mid=2032
(I'm vitruvian_boy)

Any suggestion from you would be greatly appreciated.

Thank you,
Nicola (Italy)

Labels: prsc

opportunity of a lifetime?

"Analysts and others speculating that we'll violate our covenants"

"Most of this is the result of incorrect calculations"

"Historically speaking, recessions are favorable for us"

Looking at this, the earnings grow at about 12% and earnings have been growing at 40% year over year. It's priced to shrink. This Last quarter BLEW! will the company go bankrupt? Let's see.

This last quarter they had to write off a lot of their goodwill and this came directly out of their retained earnings taking them negative.

Now I'll be honest --- pricing this company with the dividend discount model = $0 since the retained earnings are -$101M and the company makes an average quarterly profit of $3M and all that unburying it has to do.

Whatever, logisticare should benefit from cheaper gas prices.
http://www.randomuseless.info/gasprice/gasprice.html
= REVERSAL of ::::
As a result, the Company expects to report a substantial loss when it reports results for its third quarter of 2008. Due to the utilization trends and payer rate negotiation uncertainties in the transportation segment, mediation in Canada related to previously announced revenue cap enforcement, interest rate uncertainties, remaining procurement activity and the uncertain start date for the new South Carolina transportation contract,
end reversal

I think that medicare or medicaid or something will be around paying for this. Besides, police were cutting down on routes since gas prices were so high. This all turned around since the barrel of oil dive bombed out of speculation back into reality.

http://www.nytimes.com/2008/11/08/washington/08regs.html?_r=2&hp&oref=slogin&oref=slogin

“More and more people are coming onto Medicaid,” she said. “People are losing their jobs and running out of unemployment benefits. Some employers can no longer afford to provide health insurance to their workers.”




Details:

Effective December 7, 2007, we acquired all of the outstanding equity of Charter LCI Corporation, or
Charter LCI, the parent company of LogistiCare, Inc., or LogistiCare. LogistiCare, based in College
Park, Georgia, is the nation’s largest case management provider coordinating non-emergency
transportation services primarily to Medicaid recipients. The purchase price in the amount of $220
million consisted primarily of cash and 418,952 shares of our common stock valued at approximately
$13.2 million in accordance with the provisions of the purchase agreement ($12.3 million for
accounting purposes). These shares were issued in exchange for the cancellation of LogistiCare
employee stock options. In addition, we may be obligated to pay additional amounts up to $40 million
under an earnout provision contained in the merger agreement. The purchase price was paid with funds
drawn down on a new credit facility and proceeds received from a private placement of our 6.5%
Convertible Senior Subordinated Notes due 2014, or the Notes. The Notes will be convertible into
shares of our common stock at an initial conversion rate of 23.982 shares of common stock per $1,000
principal amount of Notes, which is equivalent to an initial conversion rate of $41.698 per share of
common stock. The initial conversion rate is subject to adjustment in certain events. The new credit
agreement with CIT Capital Securities LLC provides us with a senior secured first lien credit facility in
aggregate principal amount of $213.0 million comprised of a $173.0 million, six year term loan and a
$40.0 million, five year revolving credit facility. We borrowed the entire amount available under the
term loan facility and used the proceeds of the term loan to (i) fund a portion of the purchase price of
this acquisition; (ii) refinance certain existing indebtedness; and (iii) pay fees and expenses related to
this acquisition and the financing thereof. By adding non-emergency transportation services to our
service offering, we are able to focus on better managing the front end of the Medicaid service delivery
system ultimately saving government payers money through combined transportation case management
services and home based social services.

Labels: prsc