RE:Full Court Pressbandit69 wrote: What's going to drive it to the over $1.8billion marketcap (from today's approx $800million) that "analysts" are predicting?
Too much debt increases debt servicing costs as interest rates rise.
likely a sale to another party or a take-private deal - if they are truly generating $100MM+ in EBITDA and growing, the sum of the parts is worth far more than $4 per share. interest costs go away (or change) if someone buys them out and doesn't leverage the company to the same degree. Dep/Amort expenses are very much non-cash as I've previously touched on. both of those items are accounted for in the Adj EBITDA.
a sale/takeover/spinoff is not something you want to hang your hat on with an investment, but this company has always been ripe for such a transaction. the insiders own a huge amount of shares and they have previously built and sold companies. this market weakness likely scuttled their NASDAQ listing plans, but I think the end goal was to always effect a sale/merger or a take-private deal anyways.
re: rising interest costs - both CRH and MyHealth were financed mostly with cheap senior debt, which has quarterly covenant monitoring, so there won't be any surprises to shareholders if they are in any danger of defaulting. they also float on CDOR and LIBOR which is a cheaper base rate than Prime. both deals also likely had very short loan amortizations (<=5 Years), hence the high interest costs, meaning they can re-finance if required.
the fact that the stock is up on a day like today, on decent volume, is noteworthy and hopefully signals a real bottom.