Expecting great value to be unlocked soon
IMO the 68k grant (equivalent to >150K in sales based on Q4-2015 profit margin of 43.6%) was not the most important part of the last news release (NR).
Don’t get me wrong, free cash is just about the best kind of cash. It also demonstrates a nice vote of confidence from the Ontario Centre of Excellence (OCE).
The key part of the NR is the repeat reference to pilots with organizations in the USA, Canada, and the UK.
See below for a refresher:
“The CareKit Health platform allows complex patients to receive high-quality care at home, improving health outcomes, enhancing quality of life for patients and families, and reducing the cost of care delivery. CareKit provides real-time access to remote patient monitoring data, allowing for timely interventions by the care team to prevent costly hospital readmissions and emergency room visits. CareKit was acquired by Moseda in February, 2016, to expand Moseda's Community Care product portfolio.
"With this investment from OCE, CareKit will be able to support the pilots it has in the pipeline with health care organizations in the United States, United Kingdom and Canada," said Dr. Lisa Crossley, chief executive officer of Moseda.”
The first paragraph gives a nice summary of what CareKit does, in other words what problem CareKit addresses, followed by a clear statement that the pipeline includes pilots in 3 different markets, Canada, the US, and the UK.
Another time these pilots were also referred to was in the Q4 2015 MD&A filed on February, 29 2016:
"CareKit Health is a young company, but we have already secured contracts in the U.S., Canada and the U.K.," said Giancarlo De Lio, chief executive officer of CareKit Health. "Joining Moseda will give us the ability to rapidly increase our global presence and we are excited about the increased value our combined technology portfolios and talent will provide to our customers."
Additionally, on February 14, 2016, the CEO had an interview with Brayden R. Sutton. In this interview she stated the following:
- More news (referring to CareKit’s pipeline) in the coming few weeks.
- Moseda will be cash flow positive and I would be disappointed if sales are less than 3M in 2016, which will definitely be the bottom of an upswing.
- I will be very disappointed if we haven’t significantly exceeded that target (referring to the previous high MSD achieved of 36.5 cents) by year end.
Reviewing all of this together makes it crystal clear, to me at least, that any uncertainty with regards to having the CareKit contracts should not exist. Also, having these pilots announced several times tells me that we should be getting some more details on these aforementioned contracts soon.
So any non-sense about nothing interesting happening here is just not the reality. It is quite the opposite. I think we could not have any more confident and bullish signs coming from the current management. The current situation here is quite exciting. IMO there will be a lot of value unlocked as revenue generating pilots/contracts get announced with more detail.
The real question is going to be the following:
- Which organizations are these pilots with, how large, how many potential patients
- How much revenue per pilot, including # of potential patients + how much per patients (recurring revenue).
When the actual details of these contracts start to get announced, I think it will be a game changer for MSD. I am personally a very strong believer in the company and am quite confident in its short and long term success.
Shareholder’s just need to tune out all the constant noise on this board and just focus on the actual company. We had some traders ride the momentum and when the new shiny ball came along just dropped MSD and moved on to the next trade. That will happen in some stories and cannot be controlled. Either, way this company will continue to grow and fundamentals will move the share price accordingly.
This in no way is a recommendation to buy MSD, only my personal opinion. At this stage, you either like it or you don’t. For those who see value here, like myself, I think we will be handsomely rewarded soon.
The best of luck to all, narmar