RE:RE:RE:RE:RE:RE:RE:Interest Ratesbandit69 wrote: monty613 wrote: bandit69 wrote:
Yes, I understand very well. WELL has total immunity from market forces. Including the FED funds rate. I suggest you parse the FED's words from earlier this week. This rate was a confirmation rates are going up up up. I know that diluting shareholders, paying increasing interest rates, an almost 6% inflation rate in Canada and over 7% in the US, does not affect WELL IN ANY WAY!! whatsoever because they can jump over a tall building in a single bound however, I suggest, as I wrote before, to give things time. Nothing goes straight up or straight down whether good, bad or ugly.
There re so many red flags with this company I lost count. Not enough fingers and toes. 870MM of intangibles Sept 30 2021....LOL.
hi - where in my post did I say WELL has total immunity from market forces? I asked you to clarify how you arrived at a $3 per share valuation and you just deflected, yet again. you have yet to defend or back up your bearish case with anything substantive.
I am not sure why you are so hell bent on the fact that interest rates increasing will somehow take down this company? here's their debt position as at Q3:
CRH Medical Credit Facility - US$153,252,000 @ LIBOR + 1.25% to 2.50%
MyHealth Credit Facility - CAD$86,600,000 @ CDOR + 1.50% to 3.25%
for reference, LIBOR is 0.44% today and CDOR is 0.85%. even with the Fed and BOC increasing all throughout 2022, the all-in debt costs are still extremely cheap. growth is outstripping this by a large margin. a multi-million dollar increase in interest costs will not stop this company from being able to service their senior debt obligations.
re: inflation - could you explain how this will materially affect WELL's revenues? it's a healthcare company and the bulk of their revenue is government derived which is indexed for inflation. in the US, CMS adjusts reimbursements every year to account for this. I'm not sure how it works in Canada but there are similar measures.
re: intangibles - what exactly are you expecting to see on the balance sheet? they own software businesses and the FF&E in clinics (they don't even own the real estate). this is a cashflow business, not an asset-heavy business. take a look at an insurance company's balance sheet - it's the same thing. they produce big cashflows but have very little hard assets. microcap penny stock O&G companies seem to be your forte so you might have trouble comprehending this concept.
here is the income statement breakdown from Q3. decide for yourself which one-time expenses and non-cash expenses are warranted to be added back for the purposes of calculating recurring cashflow. forget EBITDA - just add back the Depreciation and Amortization. the company is cashflow positive. how hard is that to understand?
Q3
Net Loss (10,408)
Dep/Amort 16,326
Income Taxes 2,854
Interest Income (71)
Interest Expense 3,124
Rent Expense on Finance Leases (1,909)
Stock Based Compensation 9,447
FX Gain (387)
Time Based Earn Out Expenses 1,393
Share of Loss of Associates 97
Transaction Costs Expensed 1,809
Adj EBITDA 22,275
I've explained before. And, I am sorry, their 'software' is not worth almost 900MM. No way. Re: inflation, do you think govt's will increase healthcare amounts by 6%+ to account for inflation? Sure. Sure they will.
WELL paid fair value for the CRH and MyHealth assets based on the cashflows being generated. both companys are relatively asset-light. do you understand what intangibles and goodwill are?
what exactly is your point re: 6% inflation? demand is inelastic and revenues are effectively indexed because the government pays WELL and reimbursements will keep in check with inflation over the long haul. if you are worried about costs/expenses increasing due to inflation, which input costs exactly? they don't rely on oil. LOL.
you have never substantiated anything before on this board. you have simply stuck to the fact that inflation and interest rate increases will bring down this company to $3/share. your uneducated and unsubstantiated gut-instinct guess seems to be proving wrong, but let's all wait and see.