dentalcorp Holdings Ltd T.DNTL

DNTL is Grossly Mispriced

[retiredcf]

According to Colin Stewart. GLTA

Many quality businesses are trading below intrinsic value due to investor pessimism: Colin Stewart

Colin Stewart, CEO and portfolio manager at JC Clark Limited, joins BNN Bloomberg to talk about share price volatility versus business volatility. He says market volatility is creating abnormally high share price volatility in some relatively stable businesses.

https://www.bnnbloomberg.ca/video/many-quality-businesses-are-trading-below-intrinsic-value-due-to-investor-pessimism-colin-stewart~2536182

[riskmanager]

Agreed. Should trade at least 16X Multiple so around 14-15$. This is a stable business that pass through recession over the last 50 years. The SP will come back. Main problem is Dentist that got share on their deal are the one selling and putting pressure. It's going down on low volume but it will go up fast on low volume too. L-Carteton owns 78M of shares. This group is well known for their

[anesthesiadoc]

Why would dentists with shares be selling ? Thtat makes no sense as to your theory on why there is downward pressure on the stock. 

[pierrelebel]

anesthesiadoc asked "Why would dentists with shares be selling ?" Human nature! While most individuals with shares will hold them for years in anticipation of higher returns, some may come to the conclusion that a sale now may be appropriate for them when they see the share price going down month after month and are concerned the plunge will continue.. Personally I hold my shares for

[anesthesiadoc]

I know the market is under pressure but the dramatic downward movement of this stock price is quite staggering. I spoke to staff who are are currently working at a Dentcorp office and they are not happy. I get that the intent is not to change the culture of the clinic but it will happen when the main focus is the bottom line. I just don't see this a viable long term business model. 

[loopsbutterfly]

I agree... me too I dont like their business model....it is a dangerous game....they are buying not only liquid assetts....they are buying goodwill...

[riskmanager]

You spoke to staff? Seems like pure bashing! You dont know a lot about dentistery and i can feel it in your comments. Let me tell you something, do you know who is KKR? Probably not KKR just got into the Canadian Market by buying Altima and 123 dentist.   KKR owns the biggest DSO in the USA calls Heartland (1600 locations). Heartland has been in operations for more than 20 years, valuation

[anesthesiadoc]

You make it sound like Heartland has a 20-25 B valuation, that is not correct, not even close. The model is broken, you will see that their growth rate is stalled because associates are buying the practices for 6 x EBITA and which is a better deal than what DCC has to offer (when you factor in the 5 years of payback). Keep trying

[preytel]

well "doc" since you hate this company and think the model is broken perhaps you'll move on and let us lose our money? I don't remember asking for your help. 

[anesthesiadoc]

Last time I checked i am free to post questions on these boards. I am curious, if a dentist sold prior to the stock drop closer to when they went public, based on today's stock price, wouldn't thier valuation be underwater? My understanding is some of the proceeds of the sale are given in shares.

[riskmanager]

You are wrong as i see chief. Nothing to do with you, just an angry little investor that dont know anything avojt dentistery. I leave it there, waste of time

[anesthesiadoc]

I am not angry because I have not purchased this stock yet, I do feel this is compelling at the $5.50 range. I will look to enter around there. I am just asking questions as part of my fact finding

[riskmanager]

Who give a sh%t aboutyour fact finding? Nobody! See ya

[anesthesiadoc]

curious as to why this stock down on a day the market is going bezerk. I wonder if it has to do with dentists selling their shares at a huge loss. 

[pierrelebel]

"...I have not purchased this stock yet, I do feel this is compelling at the $5.50 range..." I do not know how you came up with "$5.50 range" but I suspect you will miss the boat.  DNTL shares are attractive for long term investors at current level. I purchased thousands of shares earlier this month and expect to see them trade in the $12.00/$15.00 range within two years

[anesthesiadoc]

this is getting close to breaking $7. I am hearing from dentist buddies that they are having a tough time acquiring offices but I guess we will see what the quarterly report has to show. 

[riskmanager]

you are so funny. They slow down acquisition in Q3-Q4 but they keep the ace of 35-45M EBITDA a year. Please read the M&A before stating false stuff. They bought 50 offices in Q1-Q2, what do you need more? I know they bought4-5 offcies (huge) in Qc Q4. So stop your non sense

[anesthesiadoc]

You may find my comments funny but the reality is this stock is trending down even on days the broader market is rallying. can you explain this discrepancy

[riskmanager]

I wonder how come Tesla is down +50%, Newmont Gold, Franco Nevada and probably all stock arw down 25-50%. So in what world do you live? Have you seen your portfolio? Bonds are down across the board?  maybe you are just stupid enough that i can't explani anything to you. Bear market right now and tou ask how come the stock is down hhaha. Stupido

[anesthesiadoc]

I am sorry you are dumb enough to have a portfolio that is down 50 percent. I gather from your posts that you must have sold to Dentcorp and took a large portion of it in shares. It must feel shitty to have your sale price go up in smithereens with the decline of this stock. 

[anesthesiadoc]

any insight on what is happening with this, I was aiming to enter at $5.50 but I am wondering if I should lower my entry price. any help would be appreciated. Its crazy how it is dropping despite the fact the market is roaring

[LonghandStrong]

dude, you're clearly personally motivated here. Yes, docs don't like "corporate" dentistry in Canada .... however they will sell for 12X ... cause docs, like most people are hypocrites. They likey the cashey. You know who also loves roll ups? The broader market. Whats going on in the PE space here. Billions of inflows. With a B. And it hasn't even really started in Canada ...

[preytel]

There are 170 million shares and in the last couple of days 200,000 sold down to under $7. This aint no stampede. This is a few people crushing the pps on the way out before earnings. thats it. Way less than 1% of shares has done this. Its laughable and those buying will reap the reward.

[1condor]

Decided to take the 16 percent return in less than a week. Couldnt resist that pop this morning. Will reenter as the stock cools down over the next couple days. 

[1condor]

Should also mention that the earnings were quite good...but we all know what kind of a market we are in today. So you got to take your gains when presented.

[1condor]

Wow...the way its pulling back I might be able to get back in again at 6.75 this week. Enjoy.

[anesthesiadoc]

As I had mentioned in earlier posts, their ability to acquire clinics has slowed down a lot. Only14 clinics, that is paltry. Since that purchase they have dropped their multiple even further. No one wants to sell. Additionally, they are servicing debt at 6.6 percent! that will only go up. Not good

[pierrelebel]

anesthesiadoc wrote : "...they are servicing debt at 6.6 percent! that will only go up. Not good" the Company effected an interest rate swap agreement providing for a fixed rate of approximately 6.6% per annum on $500 million of the $1.0 billion drawn under its $1.75 billion senior debt facilities bringing its total borrowing costs to approximately 6.5% based on interest rates and

[1condor]

pierrelebel...All these numbers dont mean much too me since I am only trading the stock. Looking at 6.75 again for an entry point. The old rise and repeat strategy. That pop this morning was a real bonus for us traders. Stock will struggle to close green today.

[anesthesiadoc]

ummmm who said they are payin 12 x???? last I heard was 8-10, most deals are done at 8x so your whole thesis is null and void

[LonghandStrong]

read the MD&A, they are paying 8's for singles and 10-12 for multi-location.

[anesthesiadoc]

that was 6 months ago, you need to do your research. those multiples have dropped. why don't you just call some dentists in your city and ask them yourself. 

[BlueJay2020]

I opened a position last week at $7.75 - I started watching in the $12s, but obviously still a little early!  Bought a few more at $7.00 and have some more dry powder to use if we threaten the 5s.  This is a very illiquid stock with low volumes, so movement is exacerbated.  To me, this looks like a stock with excellent long-term prospects and a potential double. I wouldn't rule

[anesthesiadoc]

the enticing part of the story is a possible buyout in the 11-12 range so thats why I will go in with a very large position at high $5's

[BlueJay2020]

Each to their own.  I prefer to edge/hedge into a position.  If the SP keeps where it is or lower, private equity will pull the trigger sooner or later and I don't want to be on the wrong side of that trade for the sake of a few cents.  

[1condor]

I have been watching this stock for months but remained on the fence as the stock just continued to tick lower (and still is). I suspect the bottom is near and will start to wade in gradually over the coming weeks. 

[1condor]

Starting accumulating my position this morning at 6.75. 

[1condor]

Anonymous sure is on a buying spree. They are buying shares everytime it dips below 7.