Amidst all the economic mania today, there still exists interesting opportunities for investors to investigate. Such is the case with Continucare Corp (AMEX:CNU), a small healthcare organization that does a few things very well. The company's two main services include primary care medical services through its network of medical centers and management services for independent private practice primary care physicians. The company's operations are in Florida, which despite its real estate troubles, continues to have a large migration of senior citizens seeking its harmonious and peaceful climate.

IN PICTURES: 8 Ways To Survive A Market Downturn

Small But Large
Despite being a $230 million business, Continucare is one of the largest medical providers in Florida with 18 staff model medical centers and 21 independent private practice offices.

In addition, the company launched Seredor Corporation; in August of 2009, with the acquisition of two sleep disorder facilities. These acquisitions represent a key growth opportunity for Continucare driven by a medical condition known as Obstructive Sleep Apnea, or OSA. Over 18 million Americans are afflicted with this breathing disorder while sleeping and it poses a severe risk if left untreated.

Strong Business Model
The company works with the nation's leading HMOs including Humana (NYSE:HUM), Aetna (NYSE:AET) and UnitedHealthcare (NYSE:UNH). Continucare's revenue is dominated by "risk" patients. Over 97% of the company's revenues are derived from Medicare and Medicaid patients. Even better, 90% comes from Medicare, which appears to have gotten a favorable long-term outcome in the healthcare reform bill.

Revenues have expanded from over $112 million in 2005 to $281 million at year end 2009. While net income in 2009 was less than the 2005 figure, net income in 2009 was up by over 40% from 2008 and nearly triple the $5.3 million earned in 2006. Yet both operating income and cash flow from operations have been on a steady climb upward over the same five-year period. The company's balance sheet is pristine with $14 million in cash and $200,000 in debt. Humana, one of the leading providers of government sponsored medical plans has recognized Continucare for four consecutive years with its prestigious Five Star Award.

A Healthy Future
Continucare seems on a path of continued execution of its growth plans. In addition, one board member owns over 40% of the company, a major plus in the interests of shareholders.

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

Related Articles
  1. Fundamental Analysis

    10 Major Companies Tied to the Apple Supply Chain

    Apple has one of the best supply-chain models. Here are some of the top businesses involved, and the benefits and challenges for all.
  2. Term

    What are Non-GAAP Earnings?

    Non-GAAP earnings are a company’s earnings that are not reported according to Generally Accepted Accounting Principles.
  3. Mutual Funds & ETFs

    ETF Analysis: PowerShares FTSE RAFI US 1000

    Find out about the PowerShares FTSE RAFI U.S. 1000 ETF, and explore detailed analysis of the fund that invests in undervalued stocks.
  4. Options & Futures

    Use Options to Hedge Against Iron Ore Downslide

    Using iron ore options is a way to take advantage of a current downslide in iron ore prices, whether for producers or traders.
  5. Stock Analysis

    Fortinet: A Great Play on Cybersecurity

    Discover how a healthy product mix, large-business deal growth and the boom of the cybersecurity industry are all driving Fortinet profits.
  6. Stock Analysis

    2 Catalysts Driving Intrexon to All-Time Highs

    Examine some of the main reasons for Intrexon stock tripling in price between 2014 and 2015, and consider the company's future prospects.
  7. Stock Analysis

    Net Neutrality: Pros and Cons

    The fight over net neutrality has become an amazing spectacle. But at its core, it's yet another skirmish in cable television's war to remain relevant.
  8. Charts & Patterns

    Understand How Square Works before the IPO

    Square is reported to have filed for an IPO. For interested investors wondering how the company makes money, Investopedia takes a look at its business.
  9. Technical Indicators

    4 Ways to Find a Penny Stock Worth Millions

    Thinking of trading in risky penny stocks? Use this checklist to find bargains, not scams.
  10. Professionals

    Chinese Slowdown Affects Iron Ore Market

    The Chinese economy's ongoing slowdown is having a major impact on iron ore demand.
RELATED TERMS
  1. Equity

    The value of an asset less the value of all liabilities on that ...
  2. Profit Margin

    A category of ratios measuring profitability calculated as net ...
  3. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis ...
  4. Debt Ratio

    A financial ratio that measures the extent of a company’s or ...
  5. Price-Earnings Ratio - P/E Ratio

    The Price-to-Earnings Ratio or P/E ratio is a ratio for valuing ...
  6. Net Present Value - NPV

    The difference between the present values of cash inflows and ...
RELATED FAQS
  1. How do dividends affect retained earnings?

    When a company issues a cash dividend to its shareholders, the retained earnings listed on the balance sheet are reduced ... Read Full Answer >>
  2. What is the formula for calculating compound annual growth rate (CAGR) in Excel?

    The compound annual growth rate, or CAGR for short, measures the return on an investment over a certain period of time. Below ... Read Full Answer >>
  3. What is the difference between called-up share capital and paid-up share capital?

    The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
  4. When does the fixed charge coverage ratio suggest that a company should stop borrowing ...

    Since the fixed charge coverage ratio indicates the number of times a company is capable of making its fixed charge payments ... Read Full Answer >>
  5. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  6. What is the difference between the return on total assets and an interest rate?

    Return on total assets (ROTA) represents one of the profitability metrics. It is calculated by taking a company's earnings ... Read Full Answer >>

You May Also Like

COMPANIES IN THIS ARTICLE
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!