RE:Food for thought on sister company Convalochoices999 wrote: Disclosure: I own Convalo and none of PHM
The latest press release from PHM confirms that it will be difficult for them to grow their business as they had done in their first year. Most of it was from acquistions and some organic growth. Now that financing is out of the question, my opinion only, it will be tough to grow through organic growth only. As such I think the price may stagnate going a little up and then a little down and so forth as nothing material will develop for years. New product lines will take time, maybe 5 years to catch on. This is of course my opinion.
With that in mind I believe that investors should take a serious look at Convalo the sister company. Convalo does not need acquistions to grow as PHM did. Convalo business is high margin of 25% which PHM is not. Convalo will most probably open up to 10 pods with present funds per Campbell. This will generate 15 cents per share in earnings or $ 32 million per year. With this additional $ 32 million they can build another 10 pods and so forth. You can see the domino effect developing. There is a huge market for the detox, rehabiliation and outpatient. Presently there are 16,000 facilites and if each takes 100 people it means treatment for 1,600,000 people. Statistics have show that there is an epidemic out there in the USA at all time highs with millions upon millions of patients, which far outstrips supply. It will take years before there is any point of equilbrium. 10 pods should generate $ 300 million in revenue which will be almost double what PHM is doing. Of course, this is my opinion once more.
Take with a grain of salt, but if I were in PHM, I would certainly seek to make a serious investment in Convalo. I am not saying to sell PHM but to put some of your portofolio in Convalo before it really takes off. I have a price target of $ 7 to $ 9 once 10 pods are up as people will pay for growth, just like they pay for Amazon growth. Then it will be double digits.
Just my honest opinion of course.
Thanks for your views. Although i believe Convalo may have a nice growth story i think thr PHM bigger picture concept is much more unique and a huge market. i do believe this will growth double digit. today's SP is obviously way too low