Performant's Medicare operation (25% of revenue) still offers above average growth potential. The new health care law could expand claim volume. New coding systems might make the billing process more complex, as well, boosting the need for oversight. Performant carries a sizable debt load, however. And if the student loan profitability declines the pressure on finances could rise materially. The shares may rebound over the next few quarters as the government completes its technology revamp and volume improves. But the long term outlook has become less certain due to the Obama Administration's more relaxed student repayment scheme. Our advice is to reinvest in a more dynamic Special Situation.
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