Nobilis Health Corp (HLTH-A)

A bit too cyclical for him. It shouldn’t be cyclical, but should be more stable, given the business they are in. The cyclicality concerns him. If you own, he would take a loss and move on.

Had owned this and it was extremely frustrating. The business is sound. They went out and bought surgical and day hospitals, ones that were at half capacity. Through their marketing, they increased the amount of usage and ramped up their cash flow. The company has not had the best IR relations with reporting. He would go to others where you have fewer headaches.

Not a big fan. He doesn’t like serial acquirers, as it is very easy to hide a lot of things in accounting. He wasn’t a particularly big fan of management in this.

(Market Call Minute.) Feels this is a solid Buy because it has come back in price in the last little bit, and is still really undervalued.

In the penalty box having had some earnings hiccups and accounting issues of late. Would prefer CRH Medical (CRH-T).

(A Top Pick Sept 23/15. Down 37.88%.) A Short report came out last fall that really took the stock down hard. They have addressed all the issues, and now the stock is starting to move up. He trimmed his position when the report came out, and then started gradually adding back. Very attractively valued at 6X enterprise value to EBITDA. Expects they will continue to make acquisitions, as well as grow organically.

This has fallen into that category of healthcare rollups, and came off pretty hard a year or so ago. It has since recovered, and then they missed on earnings. It has been tied up in some controversy on their suit of short sellers. Price momentum has not been great. A very volatile stock, which he doesn’t like.

Healthcare tends to do well in the summer, from about August all the right through to November. The chart has a nice double bottom at around $2.75, which implies that we could see a substantial move higher. If it can break above resistance at $6, you calculate the difference between the high ($6) and the low ($2.75), and that magnitude would be expected on the upside, but only if we break above resistance.

Just reported and earnings were decent, and also made an acquisition which created more interest. The stock has had a really tough time of it, of course being in the healthcare sector with Valeant (VRX-T) and Concordia (CXR-T). They also have accounting issues which is not good. They really need to get a big 6 accounting firm and get rid of the smaller one. Not his favourite company, but the valuation is attractive enough, so it is interesting. He would like to see a couple of more quarters.

(Market Call Minute.) Valuation is super cheap on this.

(A Top Pick May 15/15. Down 63.5%.) Still facing challenges. Small-cap companies do not have the market in their favour.

It seems to be basing. However there are some signs it is still making lower highs. Wait for it to break out.

(Market Call Minute.) Not a big fan of serial acquirers.

He owned it in the past, but was frustrated with it. They did a lot of the things they said they would do, but there have been a lot of one-time items. It scares him. There is too much negative news. He wants two positive quarters.

A company that has been extremely frustrating. It seems the company just can’t get out of its own way, especially when it comes to their auditors. Reported recently and missed their numbers by a fairly wide margin. Management could have done a much better job of guiding the market that they were going to be spending more money on the hospital that they had bought. This was followed next day by news that the auditors had not signed off on the financial statements, the 2^nd time this has happened. That gets investors pretty spooked. Management needs to get a little more open with what they are doing, and auditors need to understand that the company is in the business of acquiring other businesses. He owns a small piece.