AFAM was recently added to the Russell 2000. It had a runup going into June 30, then pulled back. It now seems to be resuming its relative strength in a terrible overall market environment and should be a good stock to hold in a recessionary environment.
The company reported great first quarter earnings:
Service revenues up 23%, Visiting Nurse revenues up 30%.
17% organic revenue growth plus additional gains from rolling up acquisitions.
Net income from continuing operations up 41%.
Reasonable PE ratio (16 times) for a company growing so fast.
Little analyst coverage (only two analysts).
Return on equity= 28%
Growing analyst estimates for 2009. In the last 90 days, the forecasted analyst 2009 earnings estimate was raised from 1.31 to 1.67.
Low institutional ownership (only 17%). Lots of potential upside as more institutional investors purchase AFAM which is now on their radar screen as a member of the Russell 2000.
Good Sponsorship: Owned by Fidelity Lo Price (Tillinghast) and Oberweis Micro Cap funds.