Zen Money News Issue 041 – The Future of Medical Diagnostics is Already Here
Hot Penny Stocks – Fonar Corporation (FONR)
Bob Harper, Managing Editor, The Zenect Wealth Report
On The Radar Report
Nineteen-seventy was a monumental year for diagnostic science with the discovery of the technology that makes MRI machines possible. The inventors knew they had something big on their hands. And so did some medical entrepreneurs who jumped at the chance to design and manufacture these world changing devices. The first successful human image was performed in mid-1977, and today’s company, Fonar Corporation (FONR) was incorporated the very next year.
QUICK FACTS
Ticker: FONR
Industry: Medical Appliances & Equipment
Recent Price: $6.31
Market Cap: $38.5 m
Shares Outstanding: 6.1 m
Average Volume: 15,104
Dividend Yield: N/A
Website: http://www.fonar.com/
COMPANY DESCRIPTION
Fonar Corporation is the first and oldest MR manufacturer in the world. Throughout the subsequent decades they have developed a number of industry breakthroughs. Examples include the first multi-angle oblique scanners and first mobile MRIs.
In 1997, the company formed a subsidiary, Health Management Corporation of America (HMCA). This new segment operated 11 diagnostic imaging centers and 6 multi-specialty practices, primarily in New York and Florida.
FINANCIALS
FONR’s most recent quarterly numbers were released on May 15, 2013.
The company reported revenue of $11.6 million in the quarter. Up from last year’s third quarter revenue of $9.5 million. This is an increase of 22.3%. Fonar Corporation also reported a net income of approximately $1.6 million… a year-over-year increase from a net income of $1.55 million.
As of March 31, 2013, the company reported $9.2 million in cash and $15.9 million in long-term debt.
KEY METRICS ANALYSIS
Trailing P/E: 7.6 x
Price / Sales: 0.9 x
Return on Assets: 8.3 %
Insider ownership: 2.1 %
Short Ratio: 3.8 x
Current Ratio: 1.6 x
Total Debt to Equity: 45.5
RECENT EVENTS
On March 5 the company acquired a majority interest in Health Diagnostic Management (HDM). This dramatically expanded the footprint of their patient facing diagnostic services.
To put it into perspective, HMCA performed 45,000 scans in 2012. With the combination of HDM’s 2012 numbers, this jumps up to 113,000 scans. The acquisition resulted in 14 new centers and dramatically expanded this segment’s footprint.
In addition, the company is currently developing the OR-360º™. This room-size MRI will enable surgeons, assistants and equipment to utilize the unparalleled detail of MRI guidance without obstruction from the scanner’s magnet.
MANAGEMENT TEAM
Raymond V. Damadian M.D. – Chairman of the Board, President, Treasurer
Claudette J. V. Chan – Secretary, Director
Charles N. O’Data – Lead Independent Director
Robert J. Janoff – Independent Director
Ronald G. Lehman – Independent Director
STOCK ANALYSIS
FONR’s 52-week low was $3.02 and the 52-week high was $7.94. Right now the stock is trading at $6.31. The 50-day moving average is near $6.37 a share and the 200-day moving average is at $6.22. The company has a market cap of $38.5 million and 6.1 million shares outstanding.
*All ratios and figures updated on7/15/13
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