OK, this is just a little outside the usual focus here.
I’ve been fascinated by CorVel’s stock price lately. For a company that does not appear to have much in the way of growth prospects, with a record of declining revenues over the last three years, in an industry whose lifeblood (lost time claims) is dropping, it is awfully pricey.
Yesterday the company announced it bought a California workers comp medical management firm, evidently as part of CorVel’s California strategy.
Now that’s really confusing. Managed care firms that focus on California are hurting – premiums are down, claims are down, and employers are a lot less concerned about their claims costs then they were a year ago. No pain means less interest in looking at or paying for claims management programs.
Despite the realities of the market, CorVel is enjoying a stock price that has jumped almost four times its low earlier this year.
Your guess is as good as mine.
And thanks to a friend for passing on the tip about CorVel’s acquisition.