Despite the fact that their financials continue to improve, management is buying back shares, while the company transforms itself into a geographically diversified, full service labor union dental provider it's shares continue to trade in the sub-penny range.

And . . . here we go again.

Union Dental Holdings Inc. (OTCBB: UDHI) announced today that 2007 revenues ($2.2M) increased 18% over 2006 while the company's net loss ($884,249) decreased by 56%.

So what gives? When is this stock price going to pop?

Favorable Trends Impacting Business

The Labor Department recently reported that union memberships increased for the first time in 25 yrs in '07 for the largest rise since 1979. Also, I believe that about 8 out of 10 Americans are now without dental coverage.

These two trends combine to faciliate a very favorable business environment for UDHI going forward. Very positive for the company as they continue to grow their network, as well as revenues, with bigger and better things on the horizon.

Big Plans For 2008

UDHI's labor union clientele is highlighted by such sizable organizations as:
- Communications Workers of America (CWA) - (700,000 members); - International Brotherhood of Electrical Workers - (IBEW) - (750,000 members); - United Association of Plumbers and Pipe Fitters (UA) - (300,000 members); and - Association of Flight Attendants - Communications Workers of America (AFA-CWA) - (55,000 members).

UDHI has stated recently that they have retained a local finance firm to assist them in securing financing necessary to both expand their Coral Springs, FL facility to become a full service provider and also acquire and establish similiar facilities in other attractive locations. Since the company has noted having some pretty nice competitive advantages in regards to the their ability to manufacture dental prosthetics at a significant discount to typcial normal prices, I love the full service idea.

Ownership and Profitability

By owning and operating dental practices, UDHI is able to cash in on its proven ability to produce dental prosthetics 20%-30% cheaper than the competitors. Ownership also provides access to a wider pool of sales opportunities than what was previously available when the company functioned simply as a middleman between practices and labor unions. In addition to prosthetic sales, UDHI can now generate revenues from actual dental procedures which we all know can cost a pretty penny.

A bit of digging uncovers that the typical Porcelain-fused-to-metal dental crowns range in price from roughly $600 to $900. With the proven ability to manufacture crowns and bridges about 20% - 30% cheaper than anybody out there, I'd say UDHI may have the market cornered here. If they can produce at increasingly high volume and provide relatively the same level of discount, this one operational segment alone could be enough to break the bank in the not so distant future.

CWA Represents a Major Opportunity

Through a multi-faceted approach to becoming the biggest provider of dental coverage to Union workers worldwide, UDHI continues to capitalize on a huge opportunity. Assuming Union Dental achieved 25% adoption among CWA members alone and that each union worker has three additional covered family members, UDHI would coordinate more than $1.1 billion in dental services each year.

As I've stated numerous times before, we all love penny stocks because of their potential range of movement. The chance of your $100 stock doubling in one week isn't so hot, But a penny stock like UDHI doubling in a week is exponentially possible. With shares trading at a price of around $.0065, today's news could be just what it takes to incite that type of a run.

Labels: OTCBB: UDHI, Union Dental Holdings Inc.