Spoke to IR todayhello,
I spoke with the IR team at CRH and also 2 full service brokerages who cover the stock.
I asked them about the short report thesis and if any of it holds true.
There were a few items which are out of anyones control:
1) currently the anestigia (spelling) that is administered by nurses is being paid back to CRH as if it was administered by doctors, which means a higher pay back.
2) There is no way to know if the governing body in the US will not allow this going forward.
An item to understand:
1) CRH is only 1X leveraged, and is allowed to have ccvenants of 3X leverage. This means there will NOT be a covenant issue anytime in the future. This is great news.
2) The administration of the anestgia that the nurses currently offer is on very simple procedures. Thus it is unlikely to be cancelled for pay back.
The result is:
1) assuming down the road the rules change and they will only get paid half back then EBITDA earnings support a value on the current business of $11.39 a share CAD.
2) If earnings are cut in this worst case scenerio then the cash flow will slow and they will slow down aquisitions, which means slower growth. By this, instead of over a 20% growth rate it will be 10%.
As a shareholder I am very comfortable in this scenerio being my worst case scenerio, and I will be buying a lot more shares each day this and next week.
thanks.