VFC's Stock House: Assured Pharmacy's Aggressive Expansion Could Lead To Explosive Growth
Assured Pharmacy plans on opening six new locations over the coming quarters, an indication that the growth stage could be near.
VFC's Stock House examines numerous healthcare industry trends and upcoming catalysts that could position Assured Pharmacy solidly into the thick of the chronic pain distribution and prescription market. A full report is available by visiting: http://VFCsStockHouse.com
Assured Pharmacy is a unique, personalized pharmacy that caters specifically to the prescription needs of its customers while also heavily scrutinizing the distribution and use of heavily-regulated prescription medications for both doctors and patients in order to ensure strict compliance with federal regulations. Assured has targeted the chronic pain market for its services, given the high rate of abuse and misuse in the sector, which has highlighted the need for specialized pharmacies. Its customer base of both doctors utilizing its services and patients receiving their personalized care has grown and is currently in a backlog, according to statements made in a recent letter to shareholders.
As additional funds can support, Assured will be able to take on additional customers, which could quickly double the current patient base - again according to recent communications by the company.
Four stores are currently in operation in relatively modest markets, but - as mentioned above - the Kansas store is the most recent to open and has quickly become the largest and most profitable of the four. Based on the Kansas model, Assured looks to significantly expand its presence on a national scale through the coming months, with six locations expected to open in 2013. A grand opening in Colorado is imminent, according to the latest financial report, and more highly-populated areas are being targeted in order to quickly expand its presence and patient base.
Given the growth expected in the existing stores, should funding allow, and the targeted expansion into densely-populated regions this year, Assured could be at a pivot point in becoming a mainstream destination for patients of chronic pain looking for the personalized services being highlighted by shifting industry trends.
The company is also enhancing its already-stringent distribution methods to further cement its reputation for quality, efficient and safe pharmaceutical services as the new locations are opened. This is a key component of the company's future growth strategy, as its strict compliance with regulations has the potential to position the company as an industry leader, which could then attract the interest of a broader base of doctors and patients and fuel future growth while also attracting the preferences of those national and private insurance and regulatory agencies who tend to shy away from sub par services.
These prospects and strategies could be bearing fruit just at a the right time, as many of the already-established big players in the sector, such as Walgreen (NYSE: WAG), Rite Aid (NYSE: RAD), CVS (NYSE: CVS), and Wal-Mart (NYSE: WMT) (whose business strategies rely more on selling copies of US Weekly magazine and discount Halloween toys) often come under fire for unprofessional and imperfect regulatory compliance. Through its initial operations, Assured has built itself a crisp and clean reputation thus far and the company is nicely positioned to capitalize, especially considering the amount of planned expansion over the coming quarters.
Along with the noted progress made on the business front, Assured has taken measurable steps forward on the investor relations front, too. Company shares were recently uplisted to the OTCQB from the pink sheets, a move which will inherently attract a new investor base as generally only the most speculative investors play on the pinks, while an uplisting the AMEX or NASDAQ has also been discussed, should APHY meet the respective listing requirements of those big boards. A move to one of those platforms would lend even more credibility to the company and would likely attract the investor base desired by the company, assuming the growth strategies implemented beforehand bear fruition and potential. The latest shareholder letter also noted the fact that Assured is planning a more aggressive investor relation campaign as the new locations are open, too, a factor that could potentially weigh heavily on trading over the next few quarters, if the 'road show' is successful.
What APHY needs first, though, is a steady influx of trading volume. Although modestly on the rise over recent weeks, volume is still at levels that would label this company as one with 'under the radar potential.' The still-speculative level of the market cap, too, would validate that theory, but both factors are indicative that potential investors may be taking a 'wait and see' approach before dabbling into APHY. In the speculative world, however, finding the undiscovered companies before they become discovered could return huge gains to investors willing to jump in early and who may also be willing to absorb the significant risk that comes along with jumping into the speculative sector. As previously emphasized, a strategy that includes slow accumulation geared towards the long term - with the utilization of trading shares to play the catalysts along the way - could help to alleviate the risks (although you can never eliminate them) and allow investors to potentially come out on house money before the full story plays out.
Hints at profitability exist when looking through Assured's publicly available information, especially in terms of the Kansas store, and company officials are looking to duplicate that early success with the slew of new grand openings planned for the coming months. Industry trends are heading towards reliability and accountability, a factor that heavily increases the odds that Assured can make a dent in the market, and the rampant abuse and misuse of pain medications in today's society also heavily favors the shift towards this company's niche services. It's been proven during the early-going that Assured's stringent methods of compliance drastically reduce the threat of abuse.
This could quickly turn into a pivotal year for Assured Pharmacy - one that should keep investors satisfied with a steady flow of news. Should the company start receiving more mainstream attention as growth is realized and new locations are open, a more consistent volume and trading base could be formed, which may also include a speculative share price boost, too.
A nice one to keep an eye on over the coming months.
Disclosure: Long APHY.
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