RE:RE:new coverage by 5i research And more. GLTA
How would you rate these three companies: VMD, QIPT, and VHI?
I'm thinking of replacing the first two with VHI. Both VMD and QIPT are decent small healthcare names with decent growth and margin profiles, and growth at both companies has been quite solid over the years. QIPT has been under pressure recently given the abrupt slowdown in sales growth, while VMD is in its capex cycle which negatively affects free cash flow. We think both could see a recovery, but the timeframe is quite uncertain. As these are small caps, risk is high with all. But we like VHI 'better' than the other two and would be comfortable to switch some portions to VHI over time. VHI has had solid momentum recently, but the valuation is not as attractive as it used to be so we would be opportunistically adding to VHI. In other words, we would be comfortable with a plan to switch.