Stocks in the Spotlight

April 13, 2015

Fonar Corporation

52 Week Range - 9.32 - 18.00

Fonar Corp., Inc. (
FONR ), now at $12.22. Fonar Corp. makes the only stand up MRI scanner anywhere. The original Fonar MRI is in the Smithsonian Institute as Fonar made the very first MRI scanner.
The stock Zoomed from under $10 to over $27 and Zoomed right back down.

Three + years ago (11/28/11) the Stocks in the Spotlight recommended buying Fonar at $1.68. A year later (11/28/12) we recommended buying Fonar at $4.82. Again a bit over a year later (1/13/14, Fonar hit $27.95 and for the first time in a long time the stock was too high to buy.

For the 6 months ending 12/31/2014

Fonar reported a net income of $6.7 million on revenues of $35.1 million as compared to net income of $6.7 million on revenues of $34.4 million for the six month period ended December 31, 2013.

Operating income declined, by 4.2% from $7.3 million for the six month period ended December 31, 2013 to $7.0 million for the six month period ended December 31, 2014.

For the three month period ended December 31, 2014

Fonar reported net income of $3.5 million on revenues of $17.1 as compared to net income of $3.0 million on revenues of $17.6 million for the three month period ended December 31, 2013.

Net Income Available to Common Stockholders for 2nd Quarter Fiscal 2015 increased 24% to $2.5 million versus the same period a year earlier.

Diluted Net Income Per Common Shares Available to Common Stockholders increased 21% to $0.40 per share for 2nd Quarter Fiscal 2015 versus the same period a year earlier.
This gives Fonar a PE of about 8 to 1 when near $13.

With the markets so overbought it has become increasingly hard to find a true value:
  • It has to be a stock trading nearer to the low end of the trading range;
  • It has to have a range wide enough to make it worth while;
  • It has to be a real value trading with a PE lower than average;
  • It has to be in an exciting industry;
  • It has to have a good story and a good reason to trade higher;
  • It has to have growing revenues and earnings;
  • It has to have a product with a strong future.
You get all of this when you become a FONR shareholder.

I am becoming more bearish almost daily on the market. The bull has been in charge for a long time now and even bulls get tired. The thought that the markets are going to climb forever is a ridiculous idea and we need to get it out of our head that it will.

When there is so much investor confusion, growing investor fear and stocks with mega profits, selling small amounts to be safe and putting it in a bargain like FONR makes a lot of sense.

I believe that even with a major correction FONR is so near the low it will have less to fall and since it is already undervalued it will only become a better BUY. This stock at least doubles once almost every year and it could happen again this year. It does have a tendency to move on it's own and not with the rest of the markets.

Although lately the stock seems to be moving with the markets. Just from February the stock has moved from just under $11 to just over $14 before easing back to around the $13 level before falling in 1 day to the current $12.22.

The best reason I can offer is the stock has been played by the same brokers/institutions every year and once it starts climbing everyone wants in at once. This causes the up fast, which is again the reason for the down fast.

When a stock moves up too fast it doesn't have the opportunity to build support levels on the way, therefore nothing in the way when profit takers come in and down it comes.

This makes this stock a very good one to own, as your risk, at near low levels, is almost nil. We just have to be aware that if it climbs too fast we have to say so long, adios, farewell & good bye.

Remember, there are 2 things we do not want to miss out on, the bottom and the top, and we can't have one without the other.

Buy anything under $12 is best but $13 will work just fine. You can relax even if the big correction starts sooner than later.

My top of the range would be $27.00, or 17 times eps. My "bargain" price would be under $12.

Buy anytime near $13 or better!

Click here to read all the recent Fonar's news announcements!

I'm J.R. Budke!


There is so much information on Fonar that we recommend a visit to Fonar's
website were you can view the products and additional information.

Clicking on the following link will take you there.

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J.R. Budke had been a stock broker since 1981, an options principle since 1982 and a branch office manager since 1987. He is currently inactive as a stockbroker as of 12/31/99. J.R. writes most of the articles and opinions for the Stocks in the Spotlight. The stories and stocks found on this site, or any "Stocks in the Spotlight" written material, are the opinions of J.R. Budke unless otherwise stated, and should not be considered as advice. You should not purchase any stocks solely on the opinions found on the "Stocks in the Spotlight's" web site or in any of its written material. You should also be aware that options are not for everybody and carry a high degree of risk.

The "Stocks in the Spotlight" provides information only, with all recommendations to buy or sell the profiled security as opinions of the Spotlight and should not be considered an offer to buy or sell the security.
The publishers of "Stocks in the Spotlight" are not investment advisors and are not acting in any way to influence the purchase or sale of the security. Before purchasing or selling any security profiled, it is encouraged and recommended that you consult a stockbroker or a registered financial advisor. The reader must understand that the companies we select may involve a high degree of investment risk. Potential investors must understand that they may lose all or a portion of their investment due to the risk involved.

The recommendations and updates in this article may include "forward- looking" statements as that term is defined in the Private Securities Litigation Reform Act of 1995, & therefore are subject to various risks & uncertainties. There can be no assurance that actual results, business conditions, business developments, losses & contingencies, and local & foreign factors will not differ materially from those suggested in the "forward-looking" statements as a result of various factors, including market conditions, competition, advances in technology, acquisitions, potential litigation, personnel changes, capital availability, and all sorts of other factors.

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