Gutted Stocks to Buy — IPC The Hospitalist Company (IPCM)
When it comes to healthcare companies, there was only stock that met our criteria, but it has a lot going for it. IPC The Hospitalist Company (IPCM) has arguably the worst name in the healthcare business. However, if you’re able to get past its name, IPCM delivers solid revenue growth and profits.
IPCM has approximately 2500 hospitalist providers in the U.S. These doctors work with 39,000 primary care physicians who refer patients to the company when they are in need of a hospital care physician. Needless to say, malpractice is a part of its business reality. However, something unrelated to doctor care has contributed to IPCM stock spiraling lower.
In December, the U.S. District Court for the Northern District of Illinois lifted the seal on a case involving Medicare and Medicaid claims made between Jan. 1, 2003, and June 10, 2010. The case is investigating “potential breaches of fiduciary duties by certain officers and directors at IPC The Hospitalist Company.”
There are 13 states involved in the investigation, and it’s unknown what this will do to the company’s financial position. But it has already had an effect on IPCM stock, which is down more than 30% since the lifting of this seal.
Since February 2011, IPCM stock has traded below $40 on only three occasions. And even then, the dips usually lasted a few months. With management continuing to acquire new practice groups across the U.S. while upping its emphasis on recruiting, IPCM stock looks to be undervalued, despite the legal uncertainty hanging over its head.