Two Hass Comments 2017-10-04 TOP PICK Jerome Hass
Has been looking at this for over 2 years, and met management repeatedly. Was aware of the Short attack circulating this summer, which had some pretty interesting important points to make. When a share price goes from $12 to around $3, his view is that it was fully priced in and there was a big overreaction by the street. They are exclusively based in the US, and have a medical product that is used by gastroenterologists in the clinics, kind of a Trojan horse for them because they have the clinics that are using the medical product, so have a relationship with them. With a number of the clinics, they have effectively bought 50% of the clinic, which allows them to provide the anaesthesia services on behalf of the doctors who work there. A pristine balance sheet. (Analysts’ price target is $5.)
Login to show your approval Login to show your disapproval / Be the first to comment
Price:
$3.260
Subject:
CANADIAN MIDCAP
Bias:
UNKNOWN
Owned:
Yes
CRH MEDICAL (CRH.TO)
Canadians have been spoiled for choice when it comes to terrible healthcare investments: Valeant, Patient Home Monitoring, Concordia, Nobilis Health . . . The CRH price chart suggests it is following this dubious tradition. We think not. CRH is a play on aging U.S. baby-boomers and the growing need for colonoscopy procedures. CRH provides anesthesia services in private clinics where colonoscopies are performed. This is normally a stable business with predictable cashflows and high ROEs. Unfortunately, the medical body that sets reimbursement prices in the USA lowered rates by 15 per cent in August and added new billing codes. Management estimates the net impact will be an 8per cent decline in organic revenues and 14 per cent in EBITDA in 2018. Bad news indeed, but the 75 per cent drop in its share price from its peak suggests an over-reaction. At 6.5 times next year’s EV/EBITDA, we see significant upside to a 10 times sector multiple. [We last added to the stock at $3.22 on August 9th]