GREY:ALARF - Post by User
Comment by
MrktInquisitoron Jul 22, 2017 4:04pm
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Post# 26498280
RE:What needs to happen - IMO
RE:What needs to happen - IMO Generally agree with your analysis and PT.
I have a Capital markets background and have access to some of the equity research reports on Alaris, I'd say a lot of them are very cautious on the name and their PTs are going to be backward looking.
I think what's most valuable is to reframe how you think about Alaris, bigger picture the stock is under pressure because the environment is overly competitive, so from a valuation perspective the street's view on their ability to originate deals has been downgraded.
Some of the assumptions these guys use in their modelsis 50-75M CAD Capital deployment, which is understandable, given the current difficult PE market environment (whereas Alaris has had ~100M average and as high as 200M previously).
Alaris needs to prove they can consitently add new partnerships and add-on investments/Salaris investments closer to the $100M CAD number. The recent accscient lcc announcement covers ~25M of that, and CC Comm ~5M (although partner since dec16, it was first mentioned in 2017). So ideally by end of 2017 you get another 20-30M for additions to current partners, another 25-50M in new deals and maybe another 20M of Salaris investments. Not as much about them resolving problems ASAP, but general stream of positive news and more aggressive capital deployment is important.
I don't think $18-20 is a range its going back to, people sitting on sidelines before earnings as you said, but I like the stock and think its going to keep edging higher.
The act of raising the dividend would be a good move from an optics perspective, but I think they should wait until majority of problems are fully resolved and their payout ratio closer to 60-80% range. Increase would probably only be to 0.14 - not complaining its a 7%+ yield
Just some disclosure - bought in after doing my DD in early November pre-earnings, sold some after rally and got back in sub-21 before this recent release.
Big fan of the company and created account just now to respond to your message.
Cheers.