Published Wed, 21 Jun 2017 14:23:18 -0400 on Seeking Alpha
Digirad Corporation's (Nasdaq: DRAD) share price plummeted on a very disappointing 1st quarter of 2017, yet maintained it was due to a one-time "hiccup" that leadership has taken measures to ensure will not be repeated. Leadership voiced confidence in the company's ability to quickly return to profitability, reflected in their guidance for the remainder of the year and maintaining their dividend payment. If leadership is successful in righting the ship, DRAD is very undervalued at present levels with ~70% upside and a 5% dividend yield.
At the conference call company leadership discussed the issues that lead the company to drop from record profits to a net loss of $2.1 Million ($0.1 loss per share):
we've experienced some operational challenges within our mobile healthcare business unit ... which includes our trailer based mobile diagnostic imagining activities ... driven by lower utilization of our provisional fleet. To correct this situation we made some adjustments and focused on alignment to more closely follow and manage our core customers while continuing to pursue and grow revenue ... change in leadership within the business, some operational adjustments including more closely aligning sales and operational activities and adding additional resources to our provisional sales efforts. We believe these are exactly the right moves and we're very confident of success ... the assets are still there so the earnings power is still... Read more
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