Given what has happened in the market over that time span, not much is pretty good. Time will tell. This stock has continued to lag in spite of putting up good numbers. Over the past several weeks I have been trying to get a better feel for what is happening in the world of healthcare stocks. From where I sit, as a physician in a competitive marketplace, it is increasingly apparent to me that the service side of healthcare is a tough place to make a living.
Insurers compete for corporate dollars and in the process cut margins to razor thin levels.
The unpredictability of healthcare spending and the costs of new technology lead the insurers to squeeze hosptials, other providers and doctors to protect those margins. The hospitals have gotten into the act and are acting as insurers, and they are probably even more draconian in their cuts. The bottom line is that, on the service side, profits are being cannibalized. Up to this point Prime Medical has been able to maintain its profitability. However, I can't help but think that it is being painted with the same brush as other, less profitable healthcare service companies.