In less than two years, FONAR has gone from rags to riches
This is not a recommendation. This is a reflection on what has been one of our top performing picks in recent memory: FONAR Corporation (FONR).
History with The Bowser Report
We recommended FONAR Corporation in March 2012. The price at the time of recommendation: $1.97. In investing, and everything else for that matter, hindsight is 20/20. However, let us tell you why we believed in FONAR when it was trading below $2 a share.
We initially liked FONAR because of its technology: UPRIGHT® Multi-position(TM) MRI scanner. Instead of laying down for an MRI scan, this machine allows patients to remain in weight-bearing positions. The benefit being that doctors can fully evaluate patients. For example, with Chiari syndrome, a patient’s brain stem is compressed. When the patient lays down, the compression is reduced. So a typical MRI may show nothing out of the ordinary. The compression ensues when the patient puts weight on his or her neck. So, an UPRIGHT® MRI scan would show the problem, allowing a complete diagnosis.
FONAR became much more attractive when we looked at the company’s financials. Revenues were up slightly (4%) from fiscal 2010 to fiscal 2011. Much more impressively, the company was able to drastically reduce expenses, resulting in a net profit of $3.2 million in fiscal 2011 compared to a $3 million loss in fiscal 2010.
The company’s balance sheet was also making head way, as long-term debt decreased 15% and shareholders’ equity increased 57% through the company’s second quarter 2012.
FONAR Corporation has grown in every way since recommendation. At the time of recommendation, the company had trailing twelve month (ttm) revenues of $35.3 million, and ttm earnings of $5.2 million. For the quarter ending 09/30/13, the company posted ttm revenues of $56.5 million, and ttm earnings of $12.1 million. That’s an increase of 60% in revenues, and 133% in earnings!
Those increases run along side what was a huge run for the common stock. Again, we recommended FONAR when it was trading for just $1.97. The company jumped quickly after recommendation, and then settled down above $3 per share.
In October 2013, the company began a run that would take its shares far out of penny stock consideration. From October 1, 2013 to January 7, 2014, FONAR’s shares appreciated from $6.02 per share to $26.32 per share–an increase of 337%. The shares have since tapered off, falling back below $20/share.
Using its price at recommendation and intraday high since then, FONAR Corp’s stock grew 1,319%! FONR is our most recent rags to riches story, sealing its fate in The Bowser Report‘s top performers of all time. Congratulations to all of our subscribers who got in at the right time and held on!