Samuel Miller

@johnpringdns @MidWalesMike @imajsaclaimant News items of possible interest:

Judicial Review Into DWP’s Disabled Benefits ‘Fiasco’ http://www.irwinmitchell.com/newsandmedia/2015/february/judicial-review-into-dwps-disabled-benefits-fiasco#.VPA70TauuVI.facebook

Maximus Faces Short-Term Negative Newsflow - MAXIMUS, Inc. (NYSE:MMS) | Seeking Alpha http://seekingalpha.com/article/2944136-maximus-faces-short-term-negative-newsflow

As Bronte Capital explained in his blog entry, Australia is a significant part of Maximus' business. It accounted for 10% of Maximus' FY2014 revenues. This part of the Australian business falls into the "Human Services Segment" described above, and It is involved in outsourcing work for Australia's employment services, namely handling welfare recipients.

As it turns out, yesterday an Australian channel which would be equivalent to the British BBC did an exposé on exactly these outsourced services. And basically, in a way that was similar to what has been happening with the private education industry in the U.S., the exposé was ugly for the companies involved - alleging fraud and wrongdoing left and right.

Since the Australian contract is up for grabs later in the year, this particularly negative publicity at the very least stands to hit Maximus' Australian profitability. This profitability should at the very least be in line with the entire company's profit margin, so at least around 10% of the overall company's profits could be at risk.

It wouldn't thus be surprising if the stock quickly loses at least a visible fraction of 10% within the next couple of days. While this is short-term in nature, the potential fundamental impact is pretty clear.


A TV exposé in Australia calls into question Maximus' business there, a business representing 10% of Maximus' revenues and possibly around the same portion of its operating profits. Since this is new and unexpected information, it's likely that at least a significant portion of this now-at-risk business will be discounted by the market in the next few days.

[Note from Samuel]: See also [Australia] Extra medical tests for disability support can make health worse http://medicalxpress.com/news/2015-02-extra-medical-disability-health-worse.html and Forced Sterilization Of The Disabled In Australia Doesn't Seem To Be Going Anywhere | Bustle http://www.bustle.com/articles/65104-forced-sterilization-of-the-disabled-in-australia-doesnt-seem-to-be-going-anywhere

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