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Bullboard - Stock Discussion Forum WELL Health Technologies Corp T.WELL

Alternate Symbol(s):  WHTCF | T.WELL.DB

WELL Health Technologies Corp. is a Canada-based practitioner-focused digital healthcare company. Its healthcare and digital platform includes extensive front and back-office management software applications that help physicians run and secure their practices. Its business units include Canadian Patient Services, WELL Health USA Patient and Provider Services, and SaaS and Technology Services... see more

TSX:WELL - Post Discussion

WELL Health Technologies Corp > The truth is...
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Post by jdsd0517 on Jan 17, 2022 4:59pm

The truth is...

...WELL might be worth $0.50 per share in two years, or it might be worth $20 or more.

The problem is that this company is a hot mess of acquisitions, complex accounting (other might use a different adjective), and a non-intuitive investment thesis.

Someone is going to be right, but I am not smart enough to know who.  I will have an opinion once I see the year end financials and all the disclosures.

A while back I posted a message which read:

"Stock still looks expensive, Assuming the following:

- opening operating CF of $32million (LQA)

- operating CF growth of 50% per year for 10 years (organic and inorganic)

- operating CF growth of 10% per year thereafter in perpetuity

- annual equity increase of 10% per year

- a required rate of return of 25% per year

 

This thing is worth $4-5 today.  So bottom line, it is fairly valued. 

 

If you want to challenge the assumptions, feel free.  But note that I have been very generous on the equity increase assumption."

It wasn't well received, so I do chuckle when I see boosters using the same methodology to justify a double digit stock price.

Updating assumptions (updated numbers highlighted):

- opening operating CF of $100million (which everyone claims)

- operating CF growth of 50% per year for 10 years (organic and inorganic)

- operating CF growth of 10% per year thereafter in perpetuity

- annual equity increase of 10% per year

- a required nominal rate of return of 30% per year (given higher base rate of inflation)

 

Based on that, this thing is worth $10 per share...not enough upside to make a bet without better info.

Comment by Capharnaum on Jan 17, 2022 5:41pm
If it's worth $10 per share at a 30% rate of return, then it's a gift at current prices. I don't want to get too much into the "inflation" talk, but I think that long term inflation will still be low (around 2%), as predicted by the long term bond value on the market. I also think that's the current market assumption... Which would make WELL an even better deal now.
Comment by jdsd0517 on Jan 17, 2022 7:12pm
It's hardly a gift.  Those calculations are full of assumptions...you can't cherry pick one without looking at the basket. Forget inflation, the initial cash flow numbers and the operating cash flow growth are where the real risks are in this.  That's why it's important to look at the financial statements (including the balance sheet and SCF) for the 4th quarter and full ...more  
Comment by bandit69 on Jan 17, 2022 5:44pm
That's the whole point of serial acquisitions companies use as a business model.  I've seen it too many times. EBITDA is a gross'd up number.  Companies can borrow/finance more and ibankers can lend more while shareholders have unicorns and beautiful butterflies flying around in their heads.  If a company is buying using EBITDA it is paying too much by default.  It ...more  
Comment by monty613 on Jan 17, 2022 6:10pm
why?