- Pacific Healthcare Organization is a little known stock that I've covered since September of last year.
- The company continues to beat on revenue and grow EPS quarter after quarter, year after year.
- This company's stock has not yet fully run its course and the company is poised to uplist, should it want to.
In September of 2013, I called Pacific Healthcare a "diamond in the rough", claiming that this stock that no one had heard about is showing some great signs of serious growth.
Pacific Healthcare Organization (OTCQB:PFHO) announced their annual results yesterday, showing their company is still growing furiously and could still potentially double at this rate - even thought the company is up hundreds of percent so far.
From Pacific Healthcare Organization's website:
Pacific Healthcare Organization, Inc., through its subsidiaries, engages in managing and administering health care organizations (HCOs) and managed provider networks in the state of California. The HCOs are networks of medical providers established to serve the workers' compensation industry.
Pacific Healthcare Organization, Inc., through its two HCOs, offers injured workers a choice of enrolling in an HCO with a network managed by primary care providers requiring a referral to specialists; or a second HCO, where injured workers do not need any prior authorization to be seen and treated by specialists. The company was formerly known as Clear Air, Inc. and changed its name to Pacific Healthcare Organization, Inc. in January 2001. Pacific Healthcare Organization, Inc. was incorporated in 1970 and is based in Newport Beach, California.
The stock has returned over 424% in the last year. Look at this chart - looks like a monthly chart of a penny stock promotion, doesn't it? Look again - this is a five year chart of a company with the underlying fundamentals to support this growth.
In addition, I contend that the company can continue to grow from here and that $75 is well within reach over the coming quarters. The company currently has just 800k+ shares outstanding.
The company's press release yesterday pointed out yet another quarter of monster growth and EPS performance:
Pacific Health Care Organization had revenue of $6,573,106 for the year ended December 31, 2013 as compared with $4,826,765 of revenue for the year ended December 31, 2012. Pacific Health Care Organization reported net income of $1,232,577 or $1.54 per basic and fully diluted shares for the year ended December 31, 2013 as compared to net income of $711,389 or $0.89 per share per basic and fully diluted shares for the year ended December 31, 2012.
Cash provided by operations increased to $808,205 during the year ended December 31, 2013, from $210,602 for the same period in 2012, an increase of $597,603 or 284% percent. Cash balance at December 31, 2013 and 2012 was $1,265,535 and $479,674, respectively.
Look at the growth of this company and the metrics that it has posted for the fourth quarter, when put to a chart of its revenue and EPS.
If this company continues to grow at the rate in which its been growing, there is little to no doubt that this stock, which is thinly traded on a low float, will continue to move upwards - as it does - on low volume and with large spreads.
Of course, there are certain risks when investing in thinly traded over-the-counter stocks, as well. They can often move downward just as quickly as they can move up. However, I feel the risk of that is negated here because PFHO actually has the underlying fundamentals to support its growth. A lot of OTC stock that do eventually crash are stocks that were trading at massive multiples to begin with - sometimes as a result of promotional tactics.
PFHO is the furthest thing from that - it's a NYSE stock trapped in the OTC Markets, and I wouldn't be surprised to hear plans of the company uplisting in the future as well.
Editor's Note: This article covers a stock trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.