Stock picker: Lincare looks good

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Wednesday, July 31, 2002

CLEARWATER, Fla. - While potential cuts to Medicare Part B raise red flags for some stock analysts following Lincare, that's not the case for stock picker Rich Moroney.

According to Moroney: "Probably the biggest risk facing Lincare is the company's exposure to Medicare-reimbursed respiratory medications, which comprise about 20% of sales. Some reduction is expected in the reimbursement rates that Medicare provides for Part B, drugs. While Lincare's management does not expect Congress to act this year, it concedes that a 20% reduction in Part B drug pricing could lower 2003 per-share earnings by $0.17 to $0.20. Such an outcome would be a clear negative for the stock. But it would be one time in nature, and Congress could partly offset such a cut with an increase in the reimbursement for the service component of respiratory care." HME

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