Good morning traders,
This week’s pick is progressively solving a major problem with our health care system.
Catasys Corp. (OTCQB: CATS)
About Catasys: http://catasys.com/overview.htm
Product of focus: OnTrak treatment program
Health Care Sector: Substance Abuse
Our health plan system in the USA is broken. What specifically is broken? Medical is separated from behavioral/mental. CATS helps fix that.
CATS has a proprietary program that can save health plans a significant amount of money – potentially billions – and capture that as revenue for CATS. According to their model at critical mass this delivers a very healthy profit margin.
CATS has been signing major health plans like Aetna, Humana and other major plans and is beginning to announce developments here, like the recent one from Humana. We think the timing here is ideal.
As you can see our new profiled company has recently announced roll outs with Health care providers like, Humana (NYSE: HUM) and Aetna (NYSE: AET).
CATS Substantial Pipeline Should Drive Revenue Growth.
The Company has contracts with a number of large health insurance plans including Aetna, Coventry, Humana, and Centene. These contracts currently cover approximately 1.8 million commercially equivalent lives (CELs). Management has stated that it currently has a sales pipeline with insurers for approximately 10 million additional CELs, of which it is in advanced stages of discussion for about 4 million additional CELs.
- Recently announced national health plan starting in New Jersey (Aetna)
- Recent expansion into Florida (Humana)
- Impressive management in place (see below)
- QOQ and YOY substantial growth
- Proven model
- No direct competitors
- Scalable business
- Substantial pipeline with rapid growth potential
Approximately 77% of the outstanding common stock is beneficially owned by the chariman and CEO which limits the liquidity in the common stock and give Mr. Peizer substantial influence over the election of directors and other matters submitted to stockholders.
Terren Peizer, Chairman, Founder & CEO – Mr Peizer has founded other health care and life science companies and has a background in venture capital, investing, mergers & acquisitions, corporate finance, and previously held senior executive positions with the investment banking firms Goldman Sachs, First Boston, and Drexel Burnham Lambert. He is the Chairman of Crede Capital Group, LLC an industry leading Micro-Cap investment company and Mr. Peizer’s personal investment vehicle. He is also Founder and Chairman of NeurMedix, Inc. Mr. Peizer also served as Chairman of Cray Inc. and has held other senior executive positions with several technology and biotech companies. He holds a B.S.E. in Finance from The Wharton School of Finance and Commerce.
We are preparing part two of this report now. There are more exciting key highlights we will be covering soon.
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