dentalcorp Holdings (DNTL.TO)

It rolls up individual dental practices and is the largest provider in Canada. He is starting to accumulate shares in their Canadian funds. It is a safe, conservative and low growth industry. He is hoping to see cash flow grow 10 to 15% annually. It declared a recent dividend of 1 to 1 1/2% and is getting leverage down. Dental practices that sell to Dentalcorp receive shares and become employees of the company. It is a good model of efficiency.

It owns 570 dental practices and there are 15 000 in Canada. They are looking at how many they want to deal with and acquire, about 150. It should grow organically through cash flow and cost control. It is easily the largest dental practice company in Canada and has initiated a new dividend with a good increase in cash flows. They have debt from acquiring practices and lower interest rates would be good for that debt.       Buy 10  Hold 0  Sell 0

We're in a macro environment where small caps are just not doing well; people are just selling and not looking at the underlying businesses. Will work out slowly over time if you hold for 5 years.

IT is pretty cheap and he has been looking at it but there is a lot of debt. He would buy if the debt gets to where it is less than three years of cash flow. Pretty strong execution.

Good business that is defensive. However, debt levels high - has grown thorough debt. Would recommend watching. EBITDA would suggest company is cheap - however a true analysis of the business would suggest interest rates are a burden. Would recommend investing if the debt levels fall. 

DNTL is still getting into its acquisition and roll-out strategy, and currently trades at an OK valuation. 
The company has a strong equity position of $1.8 billion on a $1.6B market cap, although $2.1B of its assets are in goodwill, which can change quickly if an impairment charge takes place. 
Revenue growth has been averaging in the 20%+ range, and it generates positive free cash flows which is mostly puts towards acquisitions. 
We would like to see the company maintain or grow its current sales growth rates, and increase its profitability before stepping in here, but largely the company is on a decent trajectory.  
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Fantastic business, but high debt levels recently.
Currently going through a strategic review process.
Expecting a private equity business to purchase company.
Strong management team.

AND does drug distribution in western Canada. Incredibly stable business with good runway for growth. Nice compliment to a portfolio without expensive or risky plays. DNTL rolls up dental practices in Canada. A recession proof business.