Sell U.S. Neurosurgical Holdings. Lock in Gain.
U.S. Neurosurgical Holdings (USNU)
recently filed a 10-Q to report first-quarter earnings.The quarter looked amazing with revenue growth of 42% and EPS in the quarter of $0.07 due to higher revenue per patient. However, the company disclosed that it lost its contract with NYU, its only customer.
As a result, the company will explore options to move its gamma knife business to a new location with a new customer or to combine its business with another entity.
The company also generates net income from other subsidiaries in its holding company, but the revenue generated from NYU drives the company’s results.
The company does have $2.5MM of cash on its balance sheet ($0.32 per share) and no debt, so it will have plenty of time to secure a new customer. However, I think the stock will trade down once the NYU news is broadly disseminated.
We originally recommended the stock at 0.14 per share and are currently up 214%.
It’s time to lock in our profits. SELL