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Almost Family, Inc. SHORT Pick

|Includes: Almost Family Inc (AFAM)

Almost Family, Inc. (NASDAQ: AFAM) is among the foremost home healthcare providers. The company helps patients get the best nursing, personal care and rehabilitation services in the comfort of their homes. AFAM'S focus is on ensuring high quality health care to the elderly so they don't have to move to nursing homes. It enables seniors to live comfortably at home while being cared for by trained and experienced health care personnel.

For the fourth quarter of 2012, Almost Family, Inc. did report a profit. However, the corporation failed to meet the expectations of the market. The general mood on Wall Street was that the profit would be considerably higher for the corporation. That being said, they did manage to deliver on one front; revenue. Revenue for the last quarter of the year was considerably better than what was projected by analysts.

The revenue is one bright light coming from the last quarter's reports as the company is still unable to deliver on shareholder's expectations of high growth. Almost Family was one of the most hyped small-cap stocks of last year and the stunted growth is going to affect shareholder confidence. In fact, shares were down by 0.05 percent after the results were announced. However, it could very well be a knee-jerk reaction to the Q4 results and might not signal an emerging trend.

As far as the main statistics were concerned, the results were dismal at best. The adjusted earnings per share (NYSEARCA:EPS) of the company fell by over a quarter to $0.42. The previous year in the same quarter, the adjusted EPS had been $0.58. The overall revenue of the corporation, though higher than expected, still fell by over 3 percent and was $86.55 million. The corresponding figures projected by Wall Street were $0.43 and $86.13 million respectively.

Comparing the performance in Q4 to Q3, the revenue rose by 1.67 percent, while EPS fell by 4.55 percent. It is clear that the shareholders of the company are not going to be happy about the whole thing. They would have expected a greater EPS because of the higher revenue earned by Almost Family. However, this isn't the case and it will deal a serious blow to investor confidence. Prospective investors are also likely to refrain from purchasing the shares in the near future.

According to market projections, the next quarter isn't looking too promising either. For one, the earnings are estimated to remain at par with last year's level of $0.45. However, that figure has been brought down from $0.47. The overall profit a shareholder could expect to make during the year is estimated to be around $1.89 which is exactly the same as that for last year. So, the rest of the year isn't looking too optimistic for AFAM.

Signs are pointing towards a steep fall in share prices as shareholders abandon ship while new investors approach the stock with a hint of caution.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.