SUNH DD Market Cap: 77.03M 52wk Range: 3.00 - 15.01 Trading at the bottom of the 52 Week Range New All Time Lows on the stock Lets take a deeper look into the stock and the company
RSI 10 MACD on the Floor All pointing to Deeply Oversold on the Chart
Now lets look at the fundamentals the chart is Screaming Buy down at these levels
Stock IPOed back in Nov at 11$ a share now trading at just 3$
Total Revenue 1,906,861 1,880,776 1,824,184 Huge Revenues Nearly 2 Billion Dollars revenues are growing as well
Cost of Revenue 1,148,665 1,120,005 1,402,517
Gross Profit 758,196 760,771 421,667 Very nice gross profits 758 Million Dollars last year
Operating Income or Loss 30,316 72,738 121,229 Profitable now the profits have been in decline but most of the cost increase has come from 1 area and this area could also be cut i think to make the company more profitable going forward
Selling General and Administrative 659,304 620,102 246,952 See this jumped big from 3 years ago while revenues grew slightly now if we was able to cut this cost this company would be extremly profitable
Net Income Applicable To Common Shares (4,650) 38,671 109,287 The latest loss looks to be due to a 1 time loss
Total Other Income/Expenses Net (30,068)
Looking at the Quarterly Data the company is profitable in the latest Quater
Total Revenue 483,897 483,418 475,569 477,459
Cost of Revenue 287,363 300,661 283,990 284,486
Gross Profit 196,534 182,757 191,579 192,973
Operating Expenses
Research Development - - - -
Selling General and Administrative 169,162 186,787 159,779 158,094
Non Recurring 5,471 4,583 5,068 5,121
Others 7,579 10,276 12,725 12,659
Total Operating Expenses - - - -
Operating Income or Loss 14,322 (18,889) 14,007 17,099
Income from Continuing Operations
Total Other Income/Expenses Net - (30,068) - -
Earnings Before Interest And Taxes 14,322 (48,957) 14,007 17,099
Interest Expense - - - -
Income Before Tax 14,322 (48,957) 14,007 17,099
Income Tax Expense 5,872 (17,026) 5,559 7,135
Minority Interest - - - -
Net Income From Continuing Ops 8,450 (31,931) 8,448 9,964
Non-recurring Events
Discontinued Operations (338) (446) (892) 9
Extraordinary Items - - - -
Effect Of Accounting Changes - - - -
Other Items - - - -
Net Income 8,112 (32,377) 7,556 9,973
Preferred Stock And Other Adjustments - - - -
Net Income Applicable To Common Shares 8,112 (32,377) 7,556 9,973 Company has been profitable last 3 of the 4 quaters also looks like they are working on cutting down on the selling general and adminstrative cost i find this positive as a investor
Currency in USD.
Lets take a look at the balance sheet
Keep in mind the current market cap is just 77 Million Dollars for a company running close to 2 Billion Dollars in Annual Revenues.. and that is profitable and cash flow positive as well
on the balance sheet i am going to go with the latest quarterly data
Cash And Cash Equivalents 102,845 Trading below cash market cap is just 77 Million Dollars here folks
Net Receivables 287,250 287 Million Dollars sitting there on the balance sheet
Total Current Assets 410,605 Also this has stayed pretty consistant
Property Plant and Equipment 141,211 141 Million Dollars
Goodwill 347,520 347 Million normally i mark this amount out as there is no tangable value to it but could go along ways in valuing a buyout
Intangible Assets 41,255 Another 41 Million
Total Assets 1,116,833 1.1 Billion in total assets this is a huge company with near 2 Billion in annual revenues trading now with a tiny market cap...
Total Liabilities 595,599 595 Million keep in mind we have 410 Million just in current assets with 2 Billion in revenues and cash flow positive we have more then enough earnings power to meet current obligations with tons of shareholders value
Total Current Liabilities 233,242
Long term debt is only 151 Million as well
Other Liabilities 210,986 not sure what this is would have to dig into the 10q filing but sure that we have more then enough to cover it
Net Tangible Assets 132,459 Trading at half book value here now i am excited! Remeber market is valuing the entire company at just 77 MIllion Dollars right now!
Lets take a look at the cash flows statement
Cash Flow Get Cash Flow for:
View: Annual Data | Quarterly Data All numbers in thousands
Period Ending Dec 31, 2010 Dec 31, 2009 Dec 31, 2008
Net Income (4,650) 38,671 109,287
Operating Activities, Cash Flows Provided By or Used In
Depreciation 46,078 43,641 38,735
Adjustments To Net Income 40,858 54,614 (25,655)
Changes In Accounts Receivables (18,945) (33,547) (31,654)
Changes In Liabilities 7,720 (8,039) (1,881)
Changes In Inventories - - -
Changes In Other Operating Activities 8,847 13,568 (998)
Total Cash Flow From Operating Activities 79,908 108,908 87,834 The Cash Flows is MORE THEN THE CURRENT MARKET CAP
Investing Activities, Cash Flows Provided By or Used In
Capital Expenditures (53,528) (54,312) (51,499)
Investments - (3,275) -
Other Cash flows from Investing Activities (13,894) (12,762) 7,248
Total Cash Flows From Investing Activities (67,422) (70,349) (44,251)
Financing Activities, Cash Flows Provided By or Used In
Dividends Paid (12,126) (860) (418)
Sale Purchase of Stock 158,531 101 2,493
Net Borrowings (155,439) (25,470) (9,337)
Other Cash Flows from Financing Activities - - -
Total Cash Flows From Financing Activities (35,806) (26,229) (7,262)
Effect Of Exchange Rate Changes - - -
Change In Cash and Cash Equivalents (23,320) 12,330 36,321
Strong positive cash flows like i said its more then the current market cap! very nice
% of Shares Held by Institutional & Mutual Fund Owners: 92%
% of Float Held by Institutional & Mutual Fund Owners: 92%
Number of Institutions Holding Shares: 108
Institutions owns most of the shares so either they are selling out at a huge loss down here either way shouldnt be to many shares to go around as the float is pretty small to begin with
Virtually no insider selling if anything think that they would be buying hand over fist on a day like today. View this as being very positive
Lets compare SUNH to its competiors
Competitors Get Competitors for:
Direct Competitor Comparison
SUNH PVT1 KND PVT2 Industry
Market Cap: 76.53M N/A 544.11M N/A 250.54M
Employees: 29,992 42,0001 40,600 N/A 8.38K 29k Employees huge company here
Qtrly Rev Growth (yoy): 2.90% N/A 9.40% N/A 14.70% revenue growth kinda low compared to its competion but still growth
Revenue (ttm): 1.92B 2.65B1 4.46B N/A 538.88M way above the industry avg here on revenues
Gross Margin (ttm): 39.78% N/A 34.93% N/A 38.16% nice gross margians in line with the industry and competiors
EBITDA (ttm): 133.26M N/A 227.87M N/A 59.59M above the industry avg here
Operating Margin (ttm): 4.79% N/A 2.35% N/A 6.28% near the norm 5% close enough esp since were getting the company at such a huge discount
Net Income (ttm): -5.07M N/A 63.11M N/A N/A remeber this was due to a 1 time expense company is profitable
EPS (ttm): -0.30 N/A 1.60 N/A 0.11 earnings actually positive
P/E (ttm): N/A N/A 8.49 N/A 21.05 low PE here
PEG (5 yr expected): 0.44 N/A 0.68 N/A 0.68
P/S (ttm): 0.09 N/A 0.17 N/A 0.74 PS Lowest in the industry here
Very Strong buy here when compared to competiors
Sun Healthcare Group Inc.
18831 Von Karman
Suite 400
Irvine, CA 92612
United States - Map
Phone: 949-255-7100
Fax: 949-255-7054
Website: http://www.sunh.com
Details
Index Membership: N/A
Sector: Healthcare
Industry: Long-Term Care Facilities
Full Time Employees: 29,992
Business Summary
Sun Healthcare Group, Inc., through its subsidiaries, provides health care services primarily for senior population in the United States. The companys Inpatient Services segment operates skilled nursing centers, assisted and independent living centers, and mental health centers that provide services for individuals requiring assistance for activities in daily living. The skilled nursing centers provide daily nursing, therapeutic rehabilitation, social services, housekeeping, nutrition, and administrative services; assisted living centers offer minimal nursing assistance, housekeeping, nutrition, laundry, and administrative services; independent living centers provide security, housekeeping, nutrition, and limited laundry services; and mental health centers offer a range of inpatient and outpatient behavioral health services for adults and children through specialized treatment programs. It also provides hospice services, including palliative care, social services, pain management, and spiritual counseling. As of December 31, 2010, this segment operated 164 skilled nursing centers; 16 combined skilled nursing, assisted, and independent living centers; 10 assisted living centers; 2 independent living centers; and 8 mental health centers with an aggregate of 23,053 licensed beds in 25 states. Its Rehabilitation Therapy Services segment offers various rehabilitation therapy services, including speech pathology, physical therapy, and occupational therapy for approximately 508 centers in 36 states. The companys Medical Staffing Services segment provides licensed therapists in the areas of physical, occupational, and speech therapy; nurses; pharmacists, pharmacist technicians, and medical imaging technicians; physicians; and related medical personnel. It serves skilled nursing centers, schools, and prisons in 36 states. Sun Healthcare Group, Inc. was founded in 1989 and is based in Irvine, California.
Key Statistics
Lets face the facts here we have a aging population think the baby boomers nursing homes will grow going forward as more and more baby boomers get older and retire more and more are living longer lives they will need health care going forward so they are not going anywheres the fundamentals here are very strong as well
Now the reason for todays sell off was this news
Nursing Homes to Absorb $3.87 Billion U.S. Medicare Cut in 2012
QBy Drew Armstrong - Jul 29, 2011 5:23 PM ET .
inShare.0
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Business ExchangeBuzz up!DiggPrint Email ...Nursing home operators led by Kindred Healthcare Inc. (KND) and Sun Healthcare Group Inc. (SUNH) will see Medicare payments drop by $3.87 billion, following an April proposal designed to remedy overpayments to the industry, the U.S. said. The industry’s shares fell in after-market trading.
The 11.1 percent cut for 2012 announced today follows Medicare’s finding that a new payment system put in place this year let for-profit homes drive up reimbursements for patients. Sun Healthcare dropped as much as 21 percent at 4:46 p.m. New York time in trading after the close of the Nasdaq Stock Market.
The new rates “correct for an unintended spike in payment levels and better align Medicare payments with costs,” according to a statement by Medicare, the U.S. health plan for the elderly and disabled. The American Health Care Association, the industry’s Washington lobby group, said Medicare is moving too fast and that nursing homes have no time to adjust.
The cut “makes reductions beyond what is necessary,” said Mark Parkinson, chief executive officer of the association, in an e-mail. “This drastic reduction will be especially challenging for skilled nursing facilities to manage.”
Following Sun Healthcare, based in Irvine, California, Foothill Ranch, California-based Skilled Healthcare Group Inc. (SKH) was down 16 percent in after-market trading. Kindred, of Louisville, Kentucky, fell 14 percent.
Draft Rules
In the draft rules put out on April 28, Medicare proposed cutting payments to nursing homes by $3.94 billion. A billing provision in Medicare’s new payment system, which went into effect at the beginning of this year, brought the companies $2.1 billion in extra payments, according to a July report by the U.S. Department of Health and Human Services inspector general.
Nursing home groups had lobbied to stop the cuts, or at least shrink them. In a June 24 letter to Donald Berwick, the head of the U.S. Centers for Medicare and Medicaid Services, 152 U.S. House representatives asked the agency to delay cuts and study the issue further.
Medicare wanted to clamp down on a practice allowing nursing homes to categorize patients as getting the most intense services that the program will pay for. This year’s new payment system left a billing code open that allowed nursing homes to bill for higher rates while providing the same amount of service. Companies used that process to avoid lower revenue, according to Medicare.
The regulation shuts down that billing method, according to Medicare. It will also require nursing homes to report in more detail the therapies Medicare pays them to provide.
To contact the reporter on this story: Drew Armstrong in Washington at darmstrong17@bloomberg.net;
However i think that they will be able to adjust it amounts to around 11% in decreased revenues the company will simply have to cut cost as pointed out above they should be able to cut cost inline with the revenues decrease also this want even take place till next year so the stock today is way over reacting on the news and 152 house congress members have asked for the cuts to be delayed so thats a positive sign as well and this could be changed going forward creating one hell of a buying opt today
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