RE:RE:RE:RE:RE:RE:Solid ResultsThis was a solid quarter, and that was a good earnings call. Nice to get initial guidance that M&A spend in FY 2018 will match or exceed FY 2017. Organic patient volumes look good. I wish that the FY 2017 deals were more commercial and less federal, but management is adjusting their valuation multiples to take the higher federal skew into account, so not a big deal in the end.
As JohnnyUtah pointed out, Ed stated for the first time that the Board and Management are reviewing initiatives to address this situation, which likely either implies share buybacks or a management buyout of the Company. Latter gets us a nice pop, but I'll be honest, I don't want it. I'd rather have buybacks because I think this Company has a long runway in terms of potential FCF/share growth.
With Mr. Market's reaction, you can currently buy the stock at 6.5x levered FCF and only ~2x net debt/EBITDA, with a long runway of value accretive growth, and for the first time, management seems to be considering share buybacks that would do wonders for improving sentiment for the Company.
Lastly, regarding Ferret's comment, I know Donville has had a rough time with HCG and VRX/ENDP/CXR. But as others have pointed out per his BNN interview, Jerome Hass (Lightwater Capital) is now long CRH, and Hass was short VRX at the top.
Mr. Market is acting like an insanely depressed individual. There's a lot of pain for anything tied to US Healthcare, but I continue to think CRH is the baby being thrown out with the bathwater. We'll see if I turn out to be right. Good luck to all longs!
Best,
PSDFinancier