Another key aspect of this story totally ignored by copperfield, hearnthar and the shorts is that BBSI is providing many other valuable services besides workers compensation as a PEO. They are doing a great job as reflected in their customer retention rates. Their customers are recommending them to other customers creating a very positive growth chain. Listen the most recent investor presentation (Gateway Sept. 2014) on their web site. This story is laid out clearly. There is also some good discussion of the WC issue and the stress testing they are doing currently. (in the Q&A)
I note that hearnthar (who showed up on this board just recently along with the copperfield piece) has not addressed the excellent article that came out Saturday from Jenks. He has nothing to say about that.
They are contending that the new regulatory requirements for the banks selling debt will make it much harder for new entrants to come into the debt collection market. They also filed pro forma projections for the combined company including Aktiv that were quite favorable. PRAA is one of the largest holdings in accounts managed for Freedom Mountain Investment clients.
Edward J. Roche, President Freedom Mountain Investments
He has reached the 20% level and there may be voting rights issues beyond this point. See the DEF filing:
Pursuant to Minnesota law, certain shares beneficially owned by Mr. Nerges that, when acquired, were in excess of 20% of the Company's common stock have no voting rights because his acquisition of those shares was not approved by a vote of the Company's shareholders.
Irrational sellers are just selling anything to raise cash. Often they pick their biggest gainers as a source of cash. Makes no sense and it will stop in time.
What evidence do you have that BBSI is "severely" under reserved for workers comp.? The company has taken two charges, one in 2009 and one in 2012. Based upon the size of these adjustments I see some evidence for modest under reserving but not "severe". In my conversations with Jim Miller the company is getting regular input from accuarials on the size of reserves.
I believe strongly that BBSI should put out a statement addressing the issues. I have sent them a message to that effect.
Edward J. Roche
President Freedom Mountain Investments
new article by Roselle Jenks out this morning. Since this is an official article (PRO) it was reviewed by editors as opposed to the blog from copperfield. The Jenks article has sound research, the copperfield piece is riddled with mis-statements and falsehoods in my view.
BBSI has been in these business for decades and there has been no implosion.
You totally ignore the very substantial risk mediation practices that BBSI has in place. That is a key core competency. The Copperfield piece has numerous misstatements of facts. It shows a very clear lack of understanding of the company and more likely a clear desire to misrepresent from what I see. Always be very cautious with people that bring up long laundry lists of weak arguments instead of one or two clear arguments with strong evidence.
Please read the new piece out this morning written by Rochelle Jenks on seeking alpha. Unlike the blog from Copperfield, this new article did go through some editorial review. In my view, it is a much more honest and thorough analysis. It is a PRO article so it will only be available for a short time to non-PRO subscribers.
The company has the possibility to buyback shares, Could happen at any time.
BBSI does have very strong growth outside of California. Look at Idaho for example. They have historically had a great business and growth in California, but they have made major strides in other areas as well. With time this diversification will increase as their great story becomes known.
Management used cash wisely to buy back shares from the former wives of Bill Sherertz. That was a tremendous coup and a big victory for shareholders.
The blog by copperfield "research" had serious factual errors and was clearly designed to mislead and create panic. Copperfield has zero credibility in my view particularly in the areas of workers compensation insurance where they have been wrong in the past with Corvel. Copperfield is a disgrace and a dis-service to the investment community.
how all of a sudden (co-incident) with the copperfield error filled blog we see so many new posters with new names on this board. Could it be that these are just made up identities associated with copperfield and their short seller backers? Quite likely.
sw (Edward J. Roche, President Freedom Mountain Investments)
Did some searching on their patent activity trying to see what the new products might be. Looks like the fluid flow area is fairly active in terms of research but also seeing some on contact lens cases.
Clearly this is a thinly traded stock and the current price does not reflect true value in my view. If you look at what the insiders have done (Nerges, and others) it clearly shows that they think the stock is worth more than 25 dollars per share. I have been buying at what I see are bargain prices.
I have a call into Jim Miller, have spoken to him a few times in the past. If possible I will post the net outcome. There may be good reasons for them not to put out a statement, but I would like to discuss it with them.
By the way there is some good discussion of the WC issue on the last investor presentation made by MIchael Elich (Sept. 2014).
Very much worth reading as opposed to the mis-statements coming from Copperfield and some of the negative posters on this board.