NEW YORK (CNN/Money) - Precis Inc., the national healthcare savings provider, is a risky proposition with plenty of upside potential for investors and a big market opportunity to attract some of the 42 million uninsured Americans, according to one industry watcher.

From the consumer angle, Precis accounts for 67 percent of sales coming from its primarily healthcare saving programs such as Care Entree -- designed to reduce out-of-pocket medical expenses at affordable rates.

Russell Cleveland, president and CEO, Renaissance Capital Group.

For investors, the Grand Prairie, Texas-based marketer of membership benefit options is well-positioned to exploit an expanding base of Americans who either can't afford or aren't eligible for medical insurance, says Russell Cleveland, president and CEO of investment management firm Renaissance Capital Group.

"There are numerous large insurance providers in health insurance, but none has the types of programs being offered by Precis," Cleveland said. "In time, there will be other competitors, but the marketplace is very large and Precis has a head start."

Although the company's shares are down 44 percent from their 52-week high in April this year, Cleveland sees great growth ahead for the stock and calls Precis a story "waiting to be discovered by Wall Street."

More from Cleveland on why he's loading up Precis shares for the funds he manages:

What do you like about Precis?

Precis (PCIS: down $0.50 to $8.95, Research, Estimates) is a unique specialty healthcare company. The company's primary business is to sell memberships to non-insurance programs that provide discounted prices from major preferred provider organizations (PPOs)

Precis' primary PPO network is PHCS, one of the largest PPOs in the nation with more than 356,000 physicians and 3,500 hospitals and other facilities. Members in the Precis programs pay up to $54.95 per month to obtain discounts on health services.

Additionally, the company has recently begun offering to agents a major medical policy that can be marketed to both individuals and companies. Currently, it has an estimated 80,000 members and is growing rapidly. Precis does not take any insurance risks itself.

Precis' marketplace is very large. It is estimated that 42 million Americans have no health insurance.

The current health care system is not working and the type of plans offered by Precis is I believe where the world is going.

The use of direct marketing gives the company almost an unlimited marketplace. Both individuals and companies are looking for lower cost alternatives. Precis is an industry transforming company. In the history of American finance, this is where the big gains are made.

I also believe the company has an outstanding CEO in Judith Henkels, who is also the founder and largest shareholder.

Does the company have any competitors?

To my knowledge, there are currently no publicly owned competitors. Also, because this is a new industry, there is not an industry sector to point to for comparisons.

What are your expectations for the stock going forward?

I believe Precis could be an outstanding growth stock. Recently, the stock hit a high of $16 and has backed off to the $10-plus level. For long-term holders, Precis could be five to 10 times bigger. The company is totally unknown so Precis could be discovered by Wall Street and be a good growth story in a slow-moving economy.

Comment on its long-term growth potential?

Wall Street estimates for Precis are for earnings-per-share of 53 cents in 2002, 94 cents in 2003 and $1.44 in 2004.

At current growth rates, these numbers could be low. For a company growing at 50 percent per annum, the price/earnings ratios could be high and result in major appreciation. With 42 million Americans with no healthcare, the market is almost unlimited.

What risks do you see unique to the stock?

I am expecting a volatile stock with wide swings in prices as with many growth stocks.

Anything dealing with healthcare seems to attract both positive and negative media stories. There are almost always unknown risks, including short sellers planting stories, so these risks must be taken into account.

What is your financial interest in the stock?

The various funds I manage own significant positions in Precis.

Any final thoughts?

I favor unique companies that can be industry transformers.

Precis is in this class and is a needed healthcare service. I like the quote "Doing well by doing good."  

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