Opinions
Bruce Campbell (2)
Salona Global Medical
SGMD-X
TOP PICK
Jun 29, 2021
No price target A new company. The CEO comes from an orthotics company that he grew from $100 million to $600 million over six years until he sold it. Non-surgical devices have IP protection. They make small acquisitions and are talking to 50 small companies before they close these deals. He expects $55 revenues, but bigger deals will push that to $75-80 million. Trades at 1.2x revenues vs. peers' 4.5x-18x. Will grow by acquisition and organically as they expand into Europe.
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Stock price when the opinion was issued
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BUY
Non-hospital surgical and rehab equipment. Will grow both organically and by acquisition. Acquisitions have been delayed. Hit estimated revenue number, and this should continue. Obtained financing. Pipeline of deals. Earnings will be lumpy. Likes management. If it weren't too small, he'd make it a Top Pick.
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Its IPO was just over a year ago. Its CEO built up another company and sold it for a ten-fold gain. He is doing the same thing through organic growth and acquisitions. It is trading at 1X revenue but is growing fast so should be 5 to 8X revenue. It is one of his bigger positions. In 2 to 5 years it should hit the radar screen of investors and will probably be sold when it reaches a certain size.
Buy 2 Hold 0 Sell 0 (Analysts’ price target is $2.50)
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TOP PICK
Has also been a past pick. When it went public just over a year ago it had $16 million in revenue which should become $70 million by year end with acquisitions and 30% organic growth. Will apply to NASDAQ when it gets to $100 revenue next year. The chairman was in the same business with DJ global which over 6 years gained 10 times. There is lots of runway to buy a business and increase cash flow. Therefore no short-term need for capital raises. Trades at 1X revenue. Buy 2 Hold 0 Sell 0 (Analysts’ price target is $2.50)
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BUY
A headwind is that it's a small-cap which the market is not buying now. Management team has a great track record. From June 2021, they've grown the company from $10 million of annual run rate revenue to $90 million (after some acquisitions). More acquisitions and organic growth lie ahead. They're profitable. It's his largest position. He sees shares going much higher.
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TOP PICK
It is in the recovery science market related to physiotherapy with machines to help patients recover from injury or surgery. It was formed one and a half years ago with 15 million in revenue growing to 50 million now, Could be 80 million by year end. Also it is profitable. The founder has successfully built out a company in a similar space and taken it from 150 million to 1.5 billion in six years then sold it to a private equity firm.
Buy 2, Hold 0, Sell 0.
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BUY
Underlying business still working fantastically. Comes down to market size and market cap. Trades at around 1x sales, whereas peers are around 3x sales. As they continue to grow organically and by acquisition, revenue keeps going up. Announced NASDAQ listing, which will boost multiple. Acquisition in progress should boost revenue by 35-40%, share price should move up.
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