CML HealthCare Inc CMHIF

I would be surprised...

[Ranger56]

if the shorts don't start covering into the Sept/18 conference call. Just ask yourself, given they stated at Q2 they have CF to cover dividend and comfortable with it, if your short would you risk that the fresh new CEO will deliver a decent bullish growth plan on Sept/18? Suggesting a short cover bias upward trend into the conference call. I would not predict if the plan will be any good, but I sure would not risk it if I were short.

[tesh]

I agree. It seems to me that the major uncertainties (i.e. contract with Ontario government and US operations) are behind them. Cannot imagine that they would cut the dividend as part of their growth plan but never say never. The only uncertainty is the growth plan and I have to believe that they are going to deliver a promising picture - why else have the conference call? Full disclosure - &

[Ranger56]

I am almost certain they will not cut their dividend on Sept/18 right after their Q2 report going on record that they have the cash flow to cover it and comfortable with it. If they did this, all Management credibility would be lost, the new CEO would never be trusted again (become hated right after he just started), and the stock would take a deep deep dive. I only hope the board, management and

[tesh]

I have followed former income trusts (and invested almost soley in them) since early 2008 and the only other one that I have seen come out with a growth plan is Parkland (PKI). The held a conference call this year to cover their 5 year plan (which was ambitious). The share price appreciated soon after the call. It was followed by stellar results and a further substantial share price increase. We

[sirbarfalot]

interesting discussions tonite................... Does anyone know the covenants on the long term debt? If there is a short position on this stock it would be a very risky undertaking given the strong free cash flows this company has and the high cost of the current dividend. Generally speaking 'shorts' do their homework much more thoroughly than 'longs'. A

[tesh]

Fair comment. Regarding the long term debt CLC entered into a new long term $400 million line of credit in Feb/12 with a 5 year maturity (i.e. Feb/17). Can't imagine, given the 2nd qtr results that and the newness of this line, that there would be any problems with the covenants. I have seen this sudden dip happen for a number of the former income trusts for no apparent reason - whether it be

[sirbarfalot]

CML's Lab asset is a license to print money guaranteed by the taxpayers of Ontario. A money spigot. Historical operating margins are in excess of 30%. CML's approximate annual revenues of 385 million x 66% x 30% =  $75+ million per annum. Lenders lick their chops at an opportunity like this, given current global credit conditions. The free cash flow from the Lab asset could 

[sirbarfalot]

global caps on IHF Imaging in Ontario to be announced soon. First another 'digital readiness' funding from the MOH (2nd this year) about to arrive. The dagger will be in the other hand.