Cheap Stocks Under 5: Sun Healthcare Group (SUNH)

Many investors are attracted to cheap stocks, like penny stocks and stocks under 5, since they have a much better opportunity to make more money, easier money, than with blue chip stocks. Investors who have educated themselves by reading all kinds of books about blue chips and paper trading cheap stocks, especially penny stocks, with an imaginary investment have changed their fortunes and made real millions by learning from their mistakes. Once you get good at it, you will learn how to seek out good cheap stocks and find yourself always trading stocks under 5, especially penny stocks, with real money.

Cheap stocks move quicker and produce larger gains than blue chips and large cap companies, especially penny stocks. One stock under 5 to pay close attention to in the coming days is Sun Healthcare Group, Inc. (Nasdaq: SUNH), a good stock to buy now which is gaining momentum and looks as if it could make a run towards its 52-week high of 14.75.

Sun Healthcare Group, Inc. (Nasdaq: SUNH)

The Baby boomer generation retirement spike is nearing and companies like Sun Healthcare that are well established now are going to reap massive rewards in the coming months, years and even decades as our country grows older and assisted living centers become more of a requirement than an option. Other than the financial highlights of Sun Healthcare, anytime you see insider trading, you have to look deeper to see what is going on with the company. Well, over the last six months, SUNH insiders purchased 91,044 shares, about 0.45% of the SUNH 20.16M share float.

Highlights of Q4 and FYE December 31, 2011 Operating Results:

  • Revenues of $472.9 million for the quarter, down 1.6% compared to Q4 2010, and $1.93 billion for the year ended, up 1.8% compared to last year;
  • Adjusted EBITDAR was $48.2 million for Q4, $243.4 million for the year ended;
  • Normalized EPS from continuing operations was break-even for Q4, $1.04 for the year ended; and
  • Free cash flow was $21.9 million for Q4, $38.9 million for the year ended

SUNH 12-Month Stock Chart:

RSI, 64.97, is coming off a dip and nearing the 70 mark indicating the stock may be overbought. SUNH stock buyer pushed the RSI to 80 last month when the stock rallied from 4 to above 5 during that period.

MACD is trending upwards as it neared the signal line at -0.006 indicating a resistance level could have been established on the stock similar to October, 2011 when the stock bottomed out at 2.06.

Stochastics indicate a smooth, bullish trend on both the %K and %D showing signs of another bull run on the stock.

SUNH Stats:

Market Cap: 123.71M
Price/Sales (ttm): 0.06
Price/Book (mrq): 0.53
Profit Margin (ttm): -15.12%
Operating Margin (ttm): 3.26%
Return on Assets (ttm): 4.28%
Return on Equity (ttm): -78.48%
Revenue (ttm): 1.93B
Revenue Per Share (ttm): 74.01
Qtrly Revenue Growth (yoy): -2.20%
Gross Profit (ttm): 758.20M
EBITDA (ttm): 93.28M

SUNH Balance Sheet Highlights:

Total Cash (mrq): 57.91M
Total Cash Per Share (mrq): 2.30
Total Debt (mrq): 89.79M
Total Debt/Equity (mrq): 39.82
Current Ratio (mrq): 1.68
Book Value Per Share (mrq): 8.97

SUNH Cash Flow Statement:

Operating Cash Flow (ttm): 83.04M
Levered Free Cash Flow (ttm): 31.76M

SUNH Share Price History:

52-Week Change: -65.83%
52-Week High (Mar 8, 2011): 14.75
52-Week Low (Oct 4, 2011): 2.06
5-Day Moving Average: 4.57
10-Day Moving Average: 4.50
50-Day Moving Average: 4.48
200-Day Moving Average: 3.56

SUNH Stock Statistics:

Avg. Volume (3 month): 366,130
Avg. Volume (10 day): 405,188
Shares Outstanding: 25.14M
Float: 20.16M
% Held by Insiders: 7.01%
Shares Short (as of 2/15/12): 1.32M
Short Ratio: 3.60
Short % of Float: 6.30%

About the Company:

Sun Healthcare Group, Inc., a healthcare services company, focuses its services on the senior population in 46 of the 50 states with approximately 29,000 employees. SUNH‘s services are provided through its subsidiaries which as of Dec. 31, 2011 were:

  • SunBridge Healthcare and its subsidiaries operate:
    • 165 skilled nursing centers,
    • 14 combined skilled nursing, assisted and independent living centers,
    • 10 assisted living centers,
    • two independent living centers and
    • eight mental health centers with an aggregate of 22,860 licensed beds in 25 states;
  • SunDance Rehabilitation provides rehabilitation therapy services to affiliated and non-affiliated centers in 36 states;
  • CareerStaff Unlimited provides medical staffing services in 40 states and
  • SolAmor Hospice provides hospice services in 11 states.

Sun Healthcare Group (SUNH) is a cheap stock under 5 to add to your watch list and enjoy the bullish run the stock should have in the coming months.

Abbreviation Guide:

M = Millions;
B = Billions;
mrq = Most Recent Quarter (as of Dec 31, 2011);
ttm = Trailing Twelve Months (as of Dec 31, 2011);
yoy = Year Over Year (as of Dec 31, 2011)
fye = Fiscal Year Ending
Shares outstanding is taken from the mrq and Market Cap is calculated using shares outstanding;
Highlights of Q4 and FYE December 31, 2011 Operating Results source:  Here

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