Dialysis Corp. of America (DCAI) has a very low market cap, making the risk and volatility greater, but also increasing potential rewards. However, the risk is well balanced with solid fundamentals.
- The quarterly revenue growth year-over-year is 21.70%
- 22.53% of outstanding shares are held by insiders, 37.80% by institutional investors
- Three analysts are covering the stock, all of which name it a "Strong Buy"
- Stanford Group recently initiated coverage of DCAI, providing a price target of $10
- Anticipated earnings for this year are $0.33 and analysts are expecting $0.43 next year, a 30%+ increase
- The company has a 5-year growth rate of 24.1%
- The CFO recently bought 1,500 shares, marking the first insider buy ever for the company
- The short position in the stock is extremely small, showing a lack of negative sentiment
This company's services are as vital to their customers as food and water. Dialysis Corporation of America currently owns 35 free-standing operating kidney hemodialysis centers located throughout the U.S. which provide patients with a full range of in-center and at-home dialysis services, as well as in- hospital services. Those who have end stage kidney failure need a new kidney or dialysis, or they will lose their life within weeks. Unfortunately, it is extremely difficult for most to obtain a kidney and operations are not always successful, making dialysis the only available alternative.
A significant increase in ESRD population, caused by increases in hypertension, diabetes and obesity, along with aging populations, is driving the dialysis industry. The North America market for ESRD Dialysis products and services is estimated to have been $28.9 billion in 2007 and is expected to more than double to $64.5 billion by the end of this year! With those revenues coming from less than 2 million patients worldwide, kidney dialysis and equipment is one of the most lucrative markets in per-capita terms.
Because the stock has a very low float of just 7.42 million shares, it is not unusual for this stock to have quick and rapid runs. Early this year the stock ran from $7.19 to $9.46 for 31.6% gains in just a few weeks, and then within a month it returned back from where it started. So as you can see the volatility is clearly present with this stock, but can be used to a discerning investor's advantage.
