Viemed Healthcare Inc VMD

RBC Capital analyst change

[donmayne]

On August 3, RBC Capital reiterated their 1-year target of $US 13 (or $Cdn 16.37 approx).  That was issued by Anton Hie.

Since then, Anton Hie has joined AdaptHealth as their VP of Finance.  
https://www.linkedin.com/in/anton-hie-8544425/

It is a small world because AdaptHealth is in a similar space and, I hear, was at one time viewed as a potential suitor for VMD. AdaptHealth suffered major reputational loss when their former CEO was charged in Europe for tax issues.  He resigned. I don't follow AdaptHealth but I heard that they had turnover of executive staff.  Their revenue guidance for 2021 is $2.5 billion and their adjusted EBITA is $580 million.  Perhaps Anton Hie has his sights set on VMD as a buyout possibility at his projected price plus or minus a premium.  With 65% held by institutions, a buyout is possible given the cash on hand and failure of their IR efforts.  

RBC Capital now lists Frank Morgan as the analyst for VMD at the same $US 13 price.
https://www.linkedin.com/in/frank-g-morgan-cfa-5895a87a/

Frank has an excellent reputation as an experienced analyst in the Healthcare Sector.  In any event, I expect that he might revisit any inherited ratings from Anton Hie and perhaps reduce the rating so that it preserves his reputation.  On the other hand, he may reasonably predict a near-term buyout and may want to take credit by continuing to recommend this target price.

Q3 revenue and earnings are a bit of an unknown. VMD was predicting a gradual return to normal in patient referrals.  With the staff hirings, there will be some drag on the bottom line because not all staff will be performing at 100%.

[JackLambert]

Nice pu$$y. Do you get it trimmed.  The news about Hie is very interesting.  With industry knowledge he priced at $16.  Nice.  These guys do not just price a deal and put it out. There are multiple levels of oversight in their brokerages - all audited.  He can happily shave a buck but I doubt there will be any major revisions These guys all they have is their

[jomen1789]

Besttobe what is your 1 year price target for Viemed? You've been way more accurate than these "analysts" and their pie in the sky targets. They aren't even asking the hard hitting questions during the conference calls like: -Viemed has 31.2 million in cash, with a 10 million credit line where less than 4 million is actually used. Why aren't you spending 5 million to 8

[JackLambert]

Because stock buy back means "we can't do our jobs".   Banks are often good at buybacks.  I'm starting to wonder if we are all talking about the same company? 

[jomen1789]

They've shown since last year that they have more cash reserves than they can spend for growth. Facts are there, tens of millions collecting dust. They've done a stock buyback before and it helped propel the share price. Are you saying that was a waste? You prefer the share price to languish while the insiders don't even deign to use their own money to buy shares at these dismal

[lscfa]

I think they are sitting on the cash in the event a large contract is signed. $30 million buys only 6,000 ventilators.     

[JackLambert]

Ah - A sane voice. I think the staffing ramp up also is a drain on cash - no one is working for free. 70 new staff has to be 5 million at least per year.    Keeping working capital free makes good sense right now.  And it makes no sense to acquire another company unless the fit is very good. We can develop staff internally - we need a target that can add strategic synergies.  

[JackLambert]

BTW before I forget.   I see one of the job ads is for an "internal control" specialist.   We are hiring auditors now.  Very nice. That my friends is called process maturity.  These guys are serious about building this all out.  one day soon we will be hiring priests and burial crews to add to the mix.  I will be among the first clients the way things

[Tropicalsun]

Iscfa even if your theory was correct, with the Phillips recall, and covid, where would Viemed get 6,000 ventilators? How long would it take to fill an order that size?

[Tropicalsun]

Iscfa, on a side note did you ever get a response back from the company in regards to the remaining 95% untapped market?? I will assume because you didn't post anything, the answer is no.

[lscfa]

Never got a reply but at least the SOBs know what investors are thinking. Re: ventilator supply, Rotech mentioned in its filings that is sourcing a new vent from China with FDA approval. Also Ventec's multi-functional vent has just been approved for single use reimbursement.   https://stockhouse.com/companies/bullboard/t.vmd/viemed-healthcare-inc?postid=33907965  

[lscfa]

30,000 Ventec V+Pro ventilators in US govt. stockpiles. Time for govt to sell some back to industry to meet current shortfall.   https://www.venteclife.com/news/general-motors-and-ventec-life-systems-joint-statement  

[jomen1789]

Viemed does not need any of that stockpile though as their supply lines are secure. I was even hoping that they could sell off some of that extra equipment supply they have at a premium price to bring in more cash, like what they did during the early days of the pandemic. Back then Viemed announced a revised guidance 1 month before the regular scheduled conference call and that substantially

[jomen1789]

That hypothetical scenario of a large contract out of nowhere can still be financed even if they spend 5 to 8 millions on a share buyback. They would still have 23 to 26 million in cash reserves left, plus their barely used, up to $10 million credit line. You really think the VA will want a big contract with Viemed this early? No way. After the current, very small study they have going, they are

[lscfa]

Look beyond the VA.    e.g. The deal announced in Feb with Commonwealth Primary Care ACO, LLC which has 10,000 patients.     

[Tropicalsun]

Good point Iscfa, I completely forgot about that, however the market is obviously saying Ho Hummm.

[jomen1789]

ISCFA, that deal with Commonwealth Primary Care is more of a partnership than an acquisition. Did it make a dent in the cash reserves? Not at all.   My point was that, whether the war coffers have 31 million USD or from 23 to 26 million USD, there is plenty of ammo to fund any of their growth initiatives.   Do I trust this management to not fumble the football and not let 30

[besttobe]

Jomen....unless there is some extraordinary surprise, like a take over offer, I believe the S/P will remain flat in current range over the next year.  As Hoyt said, they want to conserve cash, because of current industry headwinds I previously mentioned.  IMO GLTA

[jomen1789]

Your scenario is far more likely than RBC or Lake Street's pie in the sky price targets of $16 and $19 CAD. Even the $16 is a pipe dream unless they do an acquisition AND get back to 25% to 30% organic growth. I find the Beacon 1 year price target of $12.25 to be the most reasonable among the analysts. All the other ones should downgrade to Beacon's estimate and clearly indicate that any

[JackLambert]

At some point you have to come to terms with the fact we are making 30 million $ a year.   The phantom share fiasco damages the bottom line but will be broomed when the company is bought out.   Look at the underlying economics   18 months ago pre Covid we hit 11.50.  We dropped to 9.  Then came the Covid ramp up to 16.  Somewhere between 11.50 and 9 might be a

[Tropicalsun]

Jackie, with all due respect, Viemed being bought out is pure speculation at this point in time. The stock ran to $16 when they announced inclusion on the russell 3000 index, not because of covid. 

[JackLambert]

Right-O!

[Tropicalsun]

Look brother we are on the same page here, I want Viemed to succeed and grow into a bigger player in the space. This management team has dropped the ball on a couple of ocasions, I agree with jomen that a VA contract is a ways out. Just go back and listen to the cc's Hoyt himself says that it is a slow process, I get that. However another problem is the lack of material news from VMD, without

[JackLambert]

Just messing with ya.    nothing here makes any sense at all. 

[jomen1789]

Ouch, poor Besttobe lol