RE:RE:RE:RE:RE:I just don't get itjabez3 wrote: caveat emptor
if the future was that good the analysts would be buying the shares for themselves and then their clients. Instead they want you to buy the shares.
it is the oldest trick in the book
Does anybody smell a convertible debenture coming?
I can't speak to the conv debenture comment - WELL has filed a shelf prospectus which allows them to raise up to $500MM. could be debentures, could be equity - who knows. what I do know is that they will use this in conjunction with some sort of acquisition (or series of acquisitions) which will support CRH and MyHealth. it doesn't sound like they have a new business line acquisition coming any time soon. they also won't just dilute shareholders without a purpose in mind for the funding.
re: analysts - one needs to understand the nature of the investment banking business. equity research exists as a tool to i) sell ideas to clients, so they use the investment bank to trade with or do business with in some way; and ii) to curry favour with companies so the companies themselves use the investment bank to do business with. WELL has a decent amount of equity research coverage because they are an M&A business which does a lot of transactions. WELL needs investment banks to act on their behalf in such transactions, so banks are likely chasing the company to work together. things like NASDAQ listings and M&A are big $$$ for investment bankers!
i don't think the analyst targets here are overly lofty. most are based on a sum-of-the-parts methodology which benchmarks each of WELL's subsidiaries with comparable companies. most analyst targets are in the same range. one thing analysts can't model or predict is acquisitions - and WELL is highly acquisitive. both CRH and MyHealth have the ability to bolt-on additional EBITDA with small tuck-in acquisitions with relative ease. analyst targets don't really factor this in because of uncertainty of timing, how the deals are funded, etc. that's something BIG we have going for us here. the banks aren't "selling" shares to retail clients because WELL hasn't done a capital raise since CRH, MyHealth was funded mostly with senior debt. they aren't setting lofty targets to try to get retail traders to buy while they sell into it or short it (the short interest is very low here).
all that being said - there isn't anything negative I can see in the company's performance. they're growing, they're delivering, and most importantly they're delivering as *promised* and meeting/exceeding guidance. eventually, the share price will reflect the true value of said performance.