There are no safe havens in the stock market. Every stock carries risk. But some less than others. This column features stocks that have shown one or more of the following characteristics: less volatility, better earnings, larger market caps, safe and increasing dividends. In these times of turmoil, our goal is to show readers better opportunities for investing with fewer risks.

June 21, 2010 - Lincare Holdings, Inc. (LNCR-NASDAQ) together with its subsidiaries, provides oxygen and other respiratory therapy services to the home health care market in the United States. It provides home oxygen equipment, including oxygen concentrators, stationary units that provide a continuous flow of oxygen by filtering ordinary room air; and liquid oxygen systems, thermally insulated containers of liquid oxygen.

In addition, it provides various home infusion therapies, including parenteral nutrition, intravenous antibiotic therapy, enteralnutrition, chemotherapy, dobutamine infusions, immunoglobulin therapy, continuous pain management, and central catheter management. Further, the company supplies home medical equipment, such as hospital beds, wheelchairs, and other supplies. As of February 8, 2010, Lincare Holdings managed approximately 1,056 local centers in 48 states. The company was founded in 1972 and is headquartered in Clearwater, Florida.

In 2009, Lincare's earnings took their first setback since 2000, going from $2.12 in 2008 to $1.33. The stock went from $23.60 to $13 (all prices split adjusted for a 3 for 2 split on June 16). But then it started to head higher, reaching $33.45 before pulling back to $30. The resurgence in the stock price can be traced directly to the revival of earnings.

In the first quarter, earnings almost doubled, going to 45 cents (vs 24 cents), 12.50% ahead of anlaysts' forecasts. The better bottom line came from growth, both internal and through acquisitions, and higher margins. Higher productivity has been evident over several quarters as the company overcame the Medicare reimbursement cuts that took away about $275 million in sales in 2009. Medicare changes this year should only eliminate $3.6 million in revenues. Management took a scalpel to the cost of goods and services, Selling, General & Administrative expenses, and operating expenses, giving a better result as measured by percentage of revenues. Those cuts should continue to contribute to better results this year as well.

The company has been buying others, picking up 3 firms in the first quarter for $11 million. While they are small additions, they come after the company spent $32 million over the last 3 years. During the period of 2000 to 2006, average annual investment was $110 million. With Medicare cutting reimbursement, many smaller operators have seen profits suffer. Management may see this as an opportune time to once again purcahse other firms at very good prices, accelerating its market share.

More numbers: Trailing P/E is 20.46 while Forward P/E is 14.78. Price to sales ratio is 1.91. Price to book is 3.15. Book value is $9.69. Operating margin for the last 12 months was 18.03% while Profit margin was 9.68%. Return on equity was 16.00% and Return on assets was 9.26%. There's $136.54 million in cash for $1.37 a share. Total debt is $493.12 million or 34% of capital. Current ratio is 1.94. There are 99.38 million shares outstanding with a Float of 96.65 million. Insiders own 11.66% of the stock. Institutions have 104.6% of the float. There is no dividend. Value Line rates the stock A for Financial Strength.

Investors like this stock. They've pushed it from $13 to $33 in about 15 months. Earnings are back on track. Costs are going down. Market share is growing. Revenues should hit an all-time high this year at $1.70 billion, then go to $1.85 billion next year. Valuations are reasonable. But there's nothing exciting here or a catalyst that will spring the stock even higher. Still, all of these attributes are what should make Conservative investors find this stock of interest.

- Company Web site: www.lincare.com