Rotech’s stock added another 9.52% yesterday. Entering the market with a gap and gaining strongly volume at the end of the day, the stock looks like it may finally end up its previous persistent depreciation. Over 1.17 million shares were traded yesterday and it seems like investors are quite confident that the direction from now on can be only upwards.
Their enthusiasm was encouraged by a press announcement yesterday, which said that ExpressMD Solutions, a provider of remote patient monitoring systems and services has signed an agreement with Rotech, according to which Rotech will provide ExpressMD’s remote patient monitoring solution to chronically ill patients, referred by a national health plan.
Trading at a P/S ratio of only 0.06, it looks like some PR is really able to make the stock jump. Yesterday it closed at $1.15, but could not top the value achieved on the day following a previous similar contract announcement in the middle of July. Which is reasonable, since then not one, but 17 new contracts were signed and unlike the one from yesterday, they seemed to be of a more exclusive nature.
There were however further important events around Rotech Healthcare this week. Again in a press release, this year’s second quarter results were announced. The company shows growth in revenues and adjusted EBITDA, but the cash available keeps declining and it seems that the large indebtedness problem has not been solved. Plans are to refinance part of the debt, for which the conditions are unlikely to be favorable. End of March Rotech had $574 million in total liabilities and $294 million in total assets.
Hopefully, the following official SEC filing will not interrupt the just started up move of the stock, as could have been the case end of April/beginning of May this year.
