Patient Home Monitoring (PHM.V)

Has had a good run. There is still lots of opportunity. Organic growth of 20%. Continues to grow by acquisition also. Looks like it still has good news to come.

This is a rollup strategy. Acquiring monitoring centres through the US. Have been very, very good at making acquisitions. Not only are they seeing acquisition growth, but also organic growth as well. There is cross-selling between their different businesses. Now starting to sell bigger and bigger deals. Just announced a deal in Colorado, which is their largest to date. They have 12 companies they are talking to now, where there are letters of intent, and have about $140 million in revenue. They are guiding for an exit rate revenue of $100 million by the end of this year. Still trading at a reasonable valuation.

One year chart shows a big strong upward move from October. As a $1 stock it looks pretty good, for those who don’t mind the risk.

Has had some really good volume with a nice upward trend. Has had almost doubled in 6 months, so you would almost expect it to come off. The MACD is starting to roll over, but the price is continuing up. This may tell you 2 things. The price is going to come back to some level, or it is at least going to put some time in. If you have owned it for a while, maybe you should put a Stop in it to protect your investment.

Fabrice Taylor, a really good stock picker, recently had a Sell on this because it had a 20X earnings to EBITDA, which was pretty expensive. This was looking backwards, but the real upside to this company going forward will be through their acquisition pipeline. They just announced another acquisition today. He has a $1.75 target for the end of the year.

It has had some very good period of time. It is about pushing patients out of the hospital and into the home. This is a roll up story and people don’t like those. Last quarter it was all organic growth. This year they have the ability to do more acquisitions. It is one of the ones to watch, as long as they can keep executing. Not a lot of volume.

This is one of the best volume traders for weeks and months. Thinks only one broker covers it, but expects there will be more. They look after mainly elderly people and assisting US hospitals systems, which wants to get people away from the hospital and into home monitoring.

Just reported and earnings were very good. He made a call to Sell, not because he didn’t like the company, but just because he had done so well. He was up as much as 1500%, so he took profits. If you are new to the story, it is a fine Buy today. For him, he has new ideas coming out to make sure his subscribers have the cash to buy them. The company is very good.

This is his largest position in his small-cap fund. In a very sweet spot in American healthcare. Americans are trying to move patients out of hospitals, which are very expensive, and trying to keep them at home, but they want them monitored. Because of this, there are big financial incentives to get patients into their homes and have their condition monitored. This company is a rollup of smaller monitoring businesses. Very impressed with management. You have to be prepared for volatility on this. They have a lot of cash and a very nice pipeline of acquisitions. He thinks this could be a $1.50 stock in 18-24 months.

A growth by acquisition story, but also an organic growth story. He finds it really exciting that they are able to do acquisitions but also grow organically. Last quarter indicated that they are growing organically by more than 20%. In the last 3-4 weeks, they have announced 2 more acquisitions and have 20 more LOIs (Letters of Intent) that they are working on. He is expecting there will be more acquisitions. Just announced they have a $50 million annualized run rate on their revenue. They are now starting to get into bigger and bigger deals. The thought is that they are going to have excess cash flow and they are going to be paying a dividend fairly soon.

He always has a problem with Vancouver stocks that are a concept and have a compelling story. Also, when they become an overcrowded trade, which he thinks this is. Chart shows a breakout at around $0.38-$0.40 in 2014, and we are now up to $.85. Buying into this spike would not be a good idea. Chart shows no sign of a top yet, but he thinks it is too popular, too over-owned, too loved and it has gone a long ways. If you own, consider reducing a little bit and hanging onto the rest of it.

Has basically grown by acquisition. In spite of having moved up significantly in price, he thinks it is still attractive. Has $100 million market cap and trades about 11 million shares per month. Has a 24% EBITDA margin with strong sales in EBITDA growth. Also, has some cash on the shelves. Trading at about 8X enterprise value to EBITDA. There is still opportunity. Most of their activity is in the US.

Looking North America demographics, increasingly there is stuff we want to do such as diabetic, cancer, etc. out of our home. It is cheaper and more comfortable for the patient. This company has a lot of cash with lots of acquisitions in the hopper. He thinks this company is going to do well and can see it at $1.50 in 12 months.

Has been trimming his position, but some of that is tactical. He trims a lot of his winning stocks near the end of the year, because most retail investors wait until after January 1 to sell their winners while blasting out their losers to take the tax loss. This one has been a home run. He still likes management and the company. They acquire $5-$10 million revenue types of companies that have big patient lists, and then they cross sell other products into those patient lists, and have been able to generate a lot of organic growth on top of the acquisitions they have made. At some point, he thinks they are going to start running into large numbers on the amount of acquisitions that they can make. He tends to like organic growth stories better than acquisition stories.

He is surprised at how it is sort of inching up day by day. This is a monitoring device for looking after people at home. Appears to be well-run. A growth by acquisition story.