Opinions
Andrew Pyle
Andlauer Healthcare Group
AND-T
TOP PICK
Sep 18, 2023
Stock price when the opinion was issued
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Had a bit of a debt problem so they’ve been selling off assets, which has brought their overall gross cash flow down, but it has cleaned up their balance sheet. Thinks they have a bit of a shot here. Doesn’t own the stock, but owns convertible debentures that are trading $.85 on the dollar. This gives you equity like returns with a bond here if it matures at par in a couple of years. Play this one through convertible debentures.
They are undergoing a turnaround. Last fall they were looking at strategic alternatives, which led them to sell about $150 million of assets and to pay off their bank loan. Unfortunately, they still have over $90 million of convertible debentures, paying about 7.5% that they have to deal with. Has huge potential upside, but it is a very dangerous situation. Has the same old management that got them into troubles in the first place
It is a well run company in the field of medical logistics eg shipping vaccines is 60% of its business and this often involves refrigerated trucks. It is a smaller cap play but a big player in North America and huge in Canada. There are not a lot of new entrants in this area. The valuation is OK and doesn't reflect the longer term. Healthcare is considered a defensive space.