Bizaro

I was reading the transcript tp QCOR's earning call last night (Questcor Pharmaceuticals Q3 2009 Earnings Call Transcript) and saw something that made me want to run out and sell the stock today. It was something that shakes your faith in government involvement in healthcare, or anything for that matter:

John Newman - Oppenheimer

Um-hum. And what is the average Medicaid rebate cost in relation to an Acthar script in IS? We assume that it effectively sort of nets it out, is it slightly higher or is it pretty much —

Don M. Bailey

Our rebate per vial is $25,625, so it's higher — about 10% higher than the amount of money we take in. So the Medicaid system has a quirk in it that our rebate is 110% of our price. So when Steve says we provide Acthar free of charge to Medicaid, it is actually the government making a profit on is.

Can you believe that? When their product goes to Medicaid patients, QCOR has to reimburse the state MORE than the state paid for it through Medicaid.

I probably won't sell, but I did find it distressing. The entire quarter was pretty poor with one reason being that with unemployment going up, more patients are getting their drug through medicaid rather than a healthplan.

BR also reported earnings last night (Broadridge Reports First Quarter Fiscal Year 2010 Results). I felt they were pretty good. They raised revenue guidance, which is generally positive:

We are increasing our full year net revenues growth guidance to a range of 6% to 8% from our previous guidance range of 4% to 8%. We are reaffirming our Non-GAAP earnings per share guidance range of $1.50 to $1.60 on a fully-diluted basis, which excludes a negative $0.08 per share impact of one-time items related to the net effect of the Penson transaction and a foreign tax credit. The one-time items from the Penson transaction accounted for a negative $0.14 per share impact on EPS, offset by a positive $0.06 per share EPS impact from the foreign tax credit.

I do not see this stock going substantially higher than the $21 to $22 though.

I did get a delayed reaction on QXM, which announced earnings on Thursday evening while I was on vacation (Qiao Xing Mobile Reports Second Quarter 2009 Financial Results). On Friday, they dropped 7 cents but then yesterday they were up 80 cents to $3.84 or about 25% on huge volume (1.2m shares versus avg of 90k).

Finally, I did buy RGR yesterday from the mechanical portfolio. I think we still have tough economic sledding ahead and sadly I think gun sales will continue to be high. I also had a bid on FLR, which wasn't filled, but if the market slides today might be filled.