Centric Health (CHH.TO)

They are a specialty pharmacy. If you are in a long term care facility they package all the drugs into a package for you. They help patients take the right medication at the right time in the right dose.

Probably one of the biggest turnaround stories in the next two years. They got into some debt troubles and sold almost everything . They are now one of the leaders in Pharma and healthcare services for seniors residences. The new CEO is from Cardinal Health. He will grow the company. The stock has come down and the new CEO has put in aggressive cost cutting measures. They just signed an agreement for distribution of cannabis to seniors. Their robot medication dispenser for the home will send confirming Emails to loved ones and save a lot of money by encouraging people to stay at home. It is bargain basement priced. (Analysts’ target: $0.65).

Disappointing. They contoinue to ramp up their number of beds, but their surgery centres are a wild card. Hang on if you own it. Most of the bad news is behind them, and their number should rise going forward.

He is down. They suffered the perfect storm with regulatory reform and then Alberta limited the number of pills being dispensed per day. They distribute to institutions like retirement homes. They hired a new CEO with tremendous industry experience. He thinks the company is taking the right measures to cut costs and be more efficient. He still thinks healthcare is a good space.

Over the last 12 to 24 months has had a number of reimbursement cuts or rumours of them. It is now trading at a cheap valuation. Assuming no more cuts, then they should be starting to build on that. In recent earnings surgical centers were stronger than analysts expected. They have a new product to roll out the second half of this year. It is an at-home dispensing product. It'll be a 2019 story in terms of the uptick.

He used to own this. The CEO he knew suddenly and abruptly resigned. They brought a new CEO but then there were reimbursement problems. Their balance sheet is not pristine. Centric doesn’t look like a quick fix.

Has two divisions: specialty pharmacy and surgical. They dispense pharmaceuticals--CHH gets a contract at a long-term care facility and fill all their prescriptions for them. So, they get paid a dispensing fee and a margin on the prescriptions. Their surgical centres is where the long-term play is. Their growth will likely come from medical cannabis which they mentioned in their latest quarterly call, because they're the exclusive supplier at these LTC facilities. Also, they will supply automatic pill dispensers to seniors living at home to enable proper and safe medication-taking for seniors.

(A Top Pick Jan 25/17. Down 11%.) Has been a bit of a disappointment from a stock price perspective. They continue to execute their plan, and it probably got ahead of itself on a multiple basis. They are continuing to do everything they said they would do.

He likes the company. One division is an industrial pharmacy. The other is private surgery. There is increasing demand for both due to the aging demographic. Analysts are gearing up for what they see as pretty good growth in the next couple of quarters. Longer term it will do well also. It is in the sweet spot.

A healthcare story with 2 parts. One is paid for private surgeries, which he thinks is going to get a big tailwind because governments are broke. The other side is industrial pharmacy which fills prescriptions for nursing homes, etc. Lower margins, but nice volumes.

It has not done anything since it was his top pick. Nursing homes will send over scripts. It is a play on demographics. The demand for their services is going up and up. It is high risk because it is small, but he thinks you will see good things.

It is a big turnaround story over the last three years. They managed to sell off a division for more than expected. They are dispensing drugs through nursing homes. They have automation to make sure all these multiple pill packs have all the right medications in them. They get long term contracts to service these facilities. The thought is that CHH-T will end up getting all the McKesson contracts after the acquisition of Rexall, CHH-T’s supplier.

There is a lot of room for them to grow on 2 fronts. They look after prescriptions for a long-term care facility and get paid a dispensing fee for that. From that perspective, they have lots of room to grow. They have a relationship with McKesson, which bought Rexall, and it was thought that they would get some of those contracts from McKesson which would increase their earnings and cash flow. The other side of the business is their surgical centres and are looking to increase the usage so they would be much more profitable.

Just reported earnings and the stock had a pretty dramatic selloff, especially based on the numbers. This has transitioned in that they’ve had higher revenue and earnings numbers, as well as higher margins. Feels the market got a little disappointed in the growth rate, but the company has actually said that it is going to be November before the transition from Riviera beds to Chartwell beds ends. The big catalyst to watch is the debt refinancing. They’ve stated they are 80% along with a major Canadian bank. That will be a huge savings for them. He added to his holdings on the last selloff.