Providential Holdings, Inc. (OTCBB: PRVH) $0.26
While many are familiar with diversified industrial concerns such as MMM, Inc., few may have heard of Providential Holdings, which is a diversified holding company that has acquired promising technologies in some of the fastest growing markets today. Hot sectors often make for hot stocks, and shares of Providential have recently been surging. One of the best selling areas this holiday season has been mobile entertainment products. Almost all of our readers should be familiar with small screens attached to the back of an automobile headrest, which allows children to watch DVD’s or play games. The company’s ATC Technology Corp. (ATC) subsidiary manufactures and distributes mobile entertainment products for applications in cars, boats, and hotels. ATC’s Vidego™, winner of the prestigious 2001 Innovation Engineering and Design Award from the Industrial Designers Society of America, is one of the finest car theater systems available to consumers. ATC’s products are currently sold in North America, Denmark, Great Britain, and Panama both via car dealers and superstores, like Wal-Mart.
Another area that has generated a great deal of interest recently is Voice-over-IP, as small stocks in this area such as the Globe have increased 20-fold in price this year. Others like deltathree and Internap have doubled or tripled in a short period of time. The company’s Nettel subsidiary provides long-distance telephony and proprietary VoIP services to over 40 countries. VoIP is the ability to make phone calls over the Internet, which saves on long distance bills. Savings are particularly compelling in the area of international long distance calling. Nettel’s revenues were $543,995 in just the last three months (period ended September 30, 2003) versus $56,000 for the first nine months of 2002. With gross margins of 70%, the company could generate big profits if it continues this growth.
The company recently announced that it would acquire a 51% interest in Irvine College of Medical Sciences, a California corporation doing business as Atlantis Career College, for a combination of cash and restricted stock, in a move to expand into the post-secondary education market. The area has been red-hot, as stocks such as Career Education Corp. and Corinthian Colleges have soared. Atlantis Career College is currently approved to provide educational programs in medical-related fields, including Ultrasound Technology, MRI, Medical Assistant, Pharmacy Tech, Pharmaceutical Sales, Registered Nurse, NCLEX, Professional Child Care, and curricula in information technology such as 3-D Animation and Network certifications.
PRVH also owns interests in a suite of promising companies. ClearPass is a wholly-owned subsidiary of Providential and engaged in the security market. The company offers fingerprint technology to provide security and access control and also installation and maintenance services. Touchlink Communications is a wholly-owned subsidiary and provides point-of-sale terminals and prepaid calling cards to a network of retailers, speciality chains, and non-profit organizations across the US. Touchlink has signed an agreement to provide the Korean American Grocer Association with POS terminals. Lexor Holdings specializes in the manufacturing and distribution of state-of-the-art luxury pedicure spas and other products for the beauty supply and beauty salon industries. Lexor expects revenues of more than $12 million in 2004 from internal growth, in addition to anticipated acquisitions of other businesses in the beauty care industry. PHI Digital Corp. (PHI), a majority-owned subsidiary of PRVH, operates as a distributorship for Xoceco, which is a public Chinese company headquartered in Xiamen and manufactures digital TV, LCD TV and super flat TV products with more than 6,000 employees. PHI expects 2004 revenues of $15 million. Chinese stocks have been among the best performers this year.
The company reported a profit of $3.1 million or $0.05 per share for its quarter ended September 30, 2003, compared to a net loss of $393,259 or ($0.01) per share for the same quarter in 2002. Net revenues for the quarter were $4.4 million, as compared to just $42,000 for the same period a year earlier. PRVH expects to report significant growth in the upcoming quarters, as many of its subsidiaries’ businesses mature.
Since November 1st, the stock has been on a tear, rallying 188% in less than two months on increasing volume. It recently announced that it would distribute in early 2004 20% of the shares that it owns in ATC to PRVH shareholders, which could act as a catalyst for the stock. With a current market capitalization of approximately $25 million, PRVH’s ownership position in just ATC could equal its entire market capitalization, giving investors an ownership position in several other promising businesses for “free”. For those investors looking to invest in several rapidly emerging new technologies, Providential Holdings provides an intriguing approach to diversify risk.
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