Dividend or Stock buy back or Acqusition?
Which one do you prefer and why? (and which one do you think MDF should do based on MDF situation and the nature of the business that they are in)
I'm really tempted to choose dividend (who doens't like cold hard cash :) ) but I want to see more stock buy back and possibly one or two acquisition in the next 2-3 years (small and profitable and not too much goodwill created) that makes sense (for example, CNU added sleep centers to their business and seems very successful and a good synergy, or buy more clinic that already serve most of their PSN or to get additonal members, do more vertical integration. though I understand that buying members can be very costly)
but yeah, no HMO business please.. just kidding.. the HMO (though not matter people might see it as a disaster), helps MDF to get where they are now (with a lot more PSN patient than before they have the HMO and have more economies of scale now). I guess things happen for a reason, is what I wanted to say..
Any thoughts for 2010 onwards for MDF?
And what the healthcare reform might impact them? (and what is the chance of this is happening). Especially after the new Massachussets senator isn't a big fan of the new health plan proposed by our President.
HI Gang its been over 5 years now waiting for this pig to take wings. Uncertainty over the commie health care industry takeover seems to be fading a bit. Perhaps because it takes a few years for all the bad crap to hit the fan maybe MDF is drifting higher from the positive quarter and good cash position and share buy back. Anyway its good to see it holding gains and a nice steady volume each day. JOE
Hi Stan, happy to see you're still here.
I had been thinking MDF was wasting their money with the share repurchase since no one seemed to notice or care about how increasingly undervalued we had become. But I am heartened by the trading volumes since several weeks before the earnings release and through today. Apparently some are starting to notice. I am ok with them continuing to use cash to repurchase shares. My second choice would be a dividend and dead last by a far margin is an acquisition. they rarely work out as advertised.
The real question now is...what is fair value for mdf and where will it trade?
Based on number outstanding shares anywhere between 40 mil and 35 mil in the next 6 months and PE of anywhere from 8 to 15 and net income of 14.1 to 14.7 mil I'd say fair value is approximately $4.2 today and $5 within 3 months and $6.5 by December.
Where will mdf trade? I'd say we overshoot to the highside, so perhaps 8 this calendar year before settling back a bit to 6 for 2011.
mnplumb.. I know what you mean.. I've experienced that many times too.. and though it will break my heart.. but I will still take the money (compare to it become a problem in the future).. as I started thinking that there isn't such thing as a free lunch.. if management thinks it's good enough to sell out the company, maybe there is a good reason to do so.. just like uptab mentioned that most of the time acquisition doesn't pan out as it is intended to (which some of the case is probably because the suitor overpay)
uptab... nice to see you too.. I like MDF buyback.. it's not wasting money if they don't continue to dilute (I think their pace of dilution for management compensation purpose is reasonable).. I actually continue to hope that the stock stay at $2 or under while MDF continue to buy the shares.. and maybe retire another 10 million shares in the next 2-3 years... (which if the stock goes up as you predicted, then it will be costly for them to continue to buy back).
$3.20 is probably the limit they should pay for the buy back for now as that is PE of trailing 12 months earning.
Fair value probably at $3.20 right now. PE of 10. and maybe next year it will be $3.50-$4 if they can bump the EPS to .35 which I think is a stretch. remember they have been a 4 cents to 6 cents per quarter EPS company for many years.. and to jump to 10 cents EPS per quarter is not easy. but surely the buy back helps.
I think if institution see the value in MDF and continue to buy till the institution holding above 50%.. I think the stock can be aboe $4 or $5 (with PE of 12-15), but in the mean time, I think $3.20 is a reasonable price.
CNU has been getting higher PE lately and I think they are in similar business with MDF. I've been holding CNU for a long time as well and pretty happy with their performance in the last 12 months.
NONE OF THE the above. Some big shark will come and buy us out!!!! Always happen to me!!!!! Get a very company that's making $$$$ and YES we will sell out? I would like at least a 10 bagger once. Not complaining,just would like a litle guy to grow up to be a big shark!!!!.someday. Go MDF!!!!