CRH Medical Corp. (CRH.TO)

Healthcare space. The management team’s last company sold at a great multiple. They can get synergies and revenues up. It sold off here. It will be a long term hold for him.

Distributes medical products to clinics, and buys up other players that do the same type of thing. The challenge with these rollup’s is that they tend to do it with debt, and at very high valuations. This is trading at 25X EBITDA. They don’t really cash flow and this is trading at 45X cash flow. All of their growth is in the future in terms of cash flow growth. You are really counting on their growth to continue. On any kind of miss on earnings or check-back in the space, these stocks don’t have a floor for a fair bit of time before value buyers step in. Not a long-term investment, but something you might want to trade.

The best small-cap company in Canada that he can recommend. Great management team. 9X 2016 earnings. 31% ROE. He is very comfortable in saying that in 5 years it will be a $25 stock.

Continue to execute along the lines they said they were going to do. Had a very steady growing small business going back to December, and then they made an acquisition of anaesthesiology clinics and the stock really shot up. Just made another announcement today. Valuation tends to get stretched at times, but when it comes back it is one you can buy because they are probably going to continue to do acquisitions.

This is the medical stock that he is the most comfortable with as being a long-term compounder. They do colonoscopy clinics for early detection of cancer. Based in Vancouver. Good management team. Only trading at about 10 or 11 times 2016 earnings. 35% ROE.

This is widely liked. He likes the smaller healthcare companies and owns quite a few.

In terms of management, they are a little more conservative than some of the others. They were in the haemorrhoid business, but do a lot of anaesthesia for colonoscopies, etc, and that business has been growing very rapidly. Made a transformative acquisition at the end of last year, and are on the cusp of probably making a couple more over the next 6 months or so. Recent quarter was very strong and expects Q2 to be strong as well.

Had a big acquisition and we have now seen a quarter, which only represents 20% of their year. The quarter was clean. Good management team. Valuation is still reasonable. In a years time this can be a $5 or better stock.

(Market Call Minute.) A growth by acquisition story. Has doubled in the last 6 months.

A very interesting business. Their initial business was a solution for hemorrhoids. They made a transformational acquisition a few months ago of anaesthesiology services, specifically in the gastrointestinal area. They are seeing growth from an acquisition standpoint, but also from an organic standpoint now.

Hemorrhoid business. Acquisition they made is quite accretive. People are just becoming aware of this story. A high margin business.

This is getting ahead of itself. Likes the company and thinks the management team is great, but he needs to see more details before he could add more capital. He knows there are more acquisitions coming in after that, but put the current one to bed. If you are going to grow through acquisitions you have to show that you can acquire intelligently and integrate the acquisitions. Considers this as a “strong hold”.

CRH Medical (CRH-T) or Merus Labs (MSL-T)? These are not really comparable to one another. This is the one that looks very interesting. Just made an acquisition at the beginning of December, and the stock had a big run. It looks like they could produce some really high numbers. If he were buying one or the other, it would probably be this one.

A little company based in Vancouver that just had a transformational US acquisition. They are in the hemorrhoid business with clinics where people go in for procedures. This is one of those companies that is off the radar screen. His sense is that this is a $2.50 stock in a year’s time.