Friday, December 18, 2009

The Least Among Us

End of year it is common to look back and reflect. Were we naught or nice? What evils befell us? What did we accomplish? Was there meaning in our lives? Usually the only thing I consider is whether we ended up with good stock picks for the year. Next week we will be polishing off a report on the performance of the Crystal Equity Research coverage universe.

However, during this holiday season I am looking at our coverage of one particular company - Conmed Healthcare Management (CONM: NYSE AMEX) . Conmed provides health care services on contract to country and municipal detention centers. The company serves fifty-one clients in seven states, caring for over 17,000 detainees. It is a solid business. We expect Conmed to generate over $4.0 million in cash flow from operations in 2009, on $54.0 million in revenue. New contracts and possible acquisitions are in the pipeline.

I probably would not have looked past those metrics and the share price were it not for listening to the late night radio show of rock musician Alice Cooper. (Yes, he is old and more than must a little eccentric, but he spins some great rock and roll if you are into the genre.) He dedicated the show to people in jail, citing how tough it is to be in jail during the holidays. Alice called them “the least among us.”

Yes, Conmed is in business and turns a profit. However, their track record in quality of care compared to their competitors suggests the Company and its employees are doing what all the major religions call us to do - serve the least among us.

While we do not include social investing priorities in our stock selection criteria, certainly CONM shares have a place in a socially oriented portfolio.


Neither the author of the Small Cap Strategist web log, Crystal Equity Research nor its affiliates have a beneficial interest in the companies mentioned herein. Crystal Equity Research has an Accumulate rating on CONM shares.

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