Spartan Fund Management – MM Fund Protech Home Medical and Viemed Healthcare
Protech Home Medical (TSXV: PTQ) and Viemed Healthcare (TSX: VMD) are in the business of providing ventilators and oxygen to U.S. patients at home. There is an urgent need to treat patients at home, or discharge them from the hospital more quickly, to free up space for the anticipated surge of severe coronavirus patients. In early April, Viemed raised its revenue guidance for Q1/2020. Moreover, worries about a Medicaid reimbursement rate cut for 2021 have been quashed by the coronavirus. Revenues for Viemed are expected to grow 21% annually over the next two years, and earnings are expected to grow to US$0.45 in 2021.
Protech delivers home medical equipment in 11 U.S. states. The company is more diversified than Viemed, as 17% of revenue is from home ventilators, 23% is from oxygen therapy, 21% is from positive airway pressure (PAP) therapy, 19% is from sleep therapy, 11% is from home medical equipment, and 8% of revenue is mobility equipment. Recurring revenue comprises 68% of revenue, versus 32% from one-time sales. Revenue at Protech is expected to grow 19% annually for the next two years, and earnings are expected to grow to US$0.11 in 2021.