Question for Saul

Sometime last year you were interested in a company that was selling a type of health insurance that you thought would grow hugely with the implementation of the affordable care act.

What ever happened to that stock/company and your interest in it?

I don’t remember the name or ticker, but I don’t think it is listed under your current holdings.

When and why did you decide to get out?

I think we can all learn lessons not just from the companies you keep, but also from the companies you jettison.

Thanks,
Brandon

I’m also curious (if you don’t mind me asking) what was your specialty as a physician? (I’m a family doctor).

Hi Brandon

That company was HIIQ. I researched my history with it to answer your question. I sold out of it in mid November because I became disillusioned with it. It’s now (three and a half months later) up about 10% from where I sold it. My portfolio as a whole is up about 17% since then so I probably did at least as well with the cash I reinvested.

I sold out because:

I had no reliable source of information about the company.

The Obamacare implementation looked more and more questionable at the time.

The company gave away many millions to an ex-supplier last year “buying his business”, and then took him into the company as an executive at a high salary. It looked very cosy and seemed to be giving away stockholder money.

They gave away much, much, more in stock based compensation than they made in profits. Not shareholder friendly.

Finally, the PE was quite high, and because of all the complicated bookkeeping it was hard to determine what they were actually making.

I hope this helps.

Saul

3 Likes

Thanks Saul. That answers what I was wondering exactly.

-Brandon