Vision group holdings

[ratkin]

This stock is in the eye buisness , with the aging population and increased computer use , eye problems are set to increase.
Two days ago the company dissapointed the market with its result and fell from 4.20 down to 3.20 and now looks very attractive to any potential long term holders.
This stock has been bought up by Barrumundi and is seen as a longterm growth stock , despite the setback this stock still has a bright future and at current prices could be a good opportunity to jump aboard

[thereslifeafter87]

PE of about 16-18x on a full year 07 basis.

34% top line growth with only 5% NPAT growth.

They believe margins have been constrained by the cost of bringing new doctors on board (there is a time lag before the doctors are revenue positive), and from new infrastructure costs.

The company has quite a lot of debt, and nothing on the balance sheet in way of solid assets. However, it is a strong business generating good cashflow and solid NPAT margins of about 13%. EBIT margins are even better at 30% plus.

[ratkin]

Directors have been buying up this stock in last few days. Way oversold and appears to have bottomed. What with the poor result and the general market weakness anybody who was going to sell will have now done so

[Flying Goat]

Hi,

Yeah, I also have had these on the watch list for a month or so now.

Carmel and co usually pick well so I expect it is near the bottom.

Agree the balance sheet is mainly intangible, in fact the net tangible asset position is a rather hefty negative. Cash flows seem to be the most impressive numbers on the profit and loss, and revenue growth is good. My main concern is that there is no proof of this being a highly profitable business model, growth involves adding highly paid doctors, just wondering if there will be any meat left for shareholders at the end. My other concern is that the CEO dumped about 700k shares (from memory) at market towards the end of last year in the $4 plus range, never a great sign...

Anyhow, thanks for starting the thread, agree if the business model works, and this we may not know for a while, it could be a good defensive long term business to be aboard....


FG

[Flying Goat]

looks like may have bottomed, volume good today...

[ratkin]

One would hope so , seem oversold. 3.50 should be likely within the next six months or so.

[Flying Goat]

quote:Originally posted by ratkin

One would hope so , seem oversold. 3.50 should be likely within the next six months or so.




Or perhaps not, something else concerns me now to do with current assets vs current liabilities:

second glance at the balance sheet reveals they are technically insolvent!

Might explain the why the share price is finding no support.

Never the less management on board room radio say things are going swimmingly.

An odd case, I will continue to watch from the sidelines for now.

FG

[Flying Goat]

quote:Originally posted by ratkin

Very strong rebound in last two days, anybody know anything?


Nope. It seems to be on reasonable volume though...!?

[Flying Goat]

quote:Originally posted by MoSteph

I'm in. Too cheap to resist. Lots of money coming through the door. Chart looks good. Macro fundementals look great. I think there'll be a quick and easy 20% in a month on this... then out.


I would be careful MoSteph. Check liabilities first, what often looks cheep soon becomes even cheaper, esp when bordering on insolvency.

FG

[mamos]

MoSteph. What are your reasons for buying?

FG. Do you think the cash flows are insufficient for the level of debt? They are arranging a better finance deal, however I believe they need to increase their utilisation of existing facilities before they expand further. Acquisitions in the high growth areas of Queensland are acceptable but in NSW and Victoria greater efficiency is required before being justified.


quote:Originally posted by Flying Goat


quote:Originally posted by MoSteph

I'm in. Too cheap to resist. Lots of money coming through the door. Chart looks good. Macro fundementals look great. I think there'll be a quick and easy 20% in a month on this... then out.


I would be careful MoSteph. Check liabilities first, what often looks cheep soon becomes even cheaper, esp when bordering on insolvency.

FG

[Flying Goat]

Hi MoSteph, mamos and Ratkin,

Glad to see there is some interest in the forum in this stock, just to clarify my own personal opinion on the stock:

- Agree 100% with your reasons that the company has excellent macro support, this is also what attracts me to the stock, and strong reasonably dependable revenue / cash flow

- However, check page 4 of the financial statements:

Current Assets (cash/receivables/inventories) $15,000,000
Current Liabilities (Payables/short term borrowings/provisions) $42,500,000

Based on these numbers alone technically they are insolvent nearly three times over.

MoSteph, yes they are paying a dividend and your comment about funds being upset about this is quite right, but you are forgetting one thing, THE FUNDS ARE UPSET, very upset. Why do you think the stock has been dumped severely over the last months and at least two funds have issued "ceasing to be substantial holder" notices during this time? Paying a dividend with a balance sheet in this dire state is pure lunacy and they are getting punished. Borrowing costs are rising in Australia and in New Zealand, and I believe this company could easily go under. Just my thoughts based on having a good understanding of financial accounting and having seen other debt laden companies that seemed otherwise fine bite the dust, my only advice would be to think about these things before loading the boat on the basis that it looks cheap....

FG

[Lizard]

Majority of current liabilities were short term debt which has since been re-financed in favour of a larger, 3 year facility at a better rate (see pg 12 of HY report). EBITDA of $14.6m was fully sufficient to cover $3.9m of interest payments. Looks okay to me.

My biggest qualm is that eps growth is fairly ordinary for now - to boost the growth would need more organic growth rather than purchased growth since the capital cost of organic growth appears quite low.

[Flying Goat]

Points taken folks, and I stand corrected regarding the re-finance of short term borrowing to mid-term, yes that makes the situation less dangerous. If you don't mind debt then yes it is probably quite worth looking at, but personally prefer to stick to healthy balance sheet propositions, just my personal preference learned from past mistakes.

[Snow Leopard]

VGH represents the only buy I made whilst wandering. I think the company has a good long term future and bought when I thought the slide had ended and am rather disappointed that it is sitting below my buy price, I hate it when that happens.
Still short term you win some, loose some.
Longer term then currently I am confident that I will be in the money.

[Flying Goat]

This is becoming a yield stock before it becomes a growth stock!! I told you, funds do not feel good about big debt in an environment of rising interest rates, because they cannot afford to gamble with their clients money. NZ investors with this on the radar, cast your memories back Feltex looked cheap at $1.00, until the good old ANZ Bank took them to the cleaners and called them on their inability to pay debt on time. The mere fact that ANZ are involved in the refinance is concern enough for me.

[Lizard]

Flying Goat, I think comparing VGH with FTX is somewhat irresponsible. Check the ROIC, profit margin and degree of market cyclicality and I think you will understand what made FTX a substantially higher risk.

I don't hold VGH, but I have it on the radar. If it gets to a level I consider appropriate, I will buy.

[Flying Goat]

quote:Originally posted by Lizard

Flying Goat, I think comparing VGH with FTX is somewhat irresponsible. Check the ROIC, profit margin and degree of market cyclicality and I think you will understand what made FTX a substantially higher risk.

I don't hold VGH, but I have it on the radar. If it gets to a level I consider appropriate, I will buy.


Irresponsible.. haha, and paying dividends when you can barely pay your interest is... responsible? Fair enough FTX had many problems other than debt, but my point was on the danger of debt, and dodgy banks such as ANZ. In respect to holders I will abandon this thread because apparently I am talking nonsense and nobody agrees with me. so happy holding to all and I will be back to admit how wrong I was when VGH is trading at $5 in a couple of years time!

[mamos]

Hi Liz,

What do you think is an appropriate level $2.20?

[Snow Leopard]

quote:Originally posted by Flying Goat

...Irresponsible.. haha, and paying dividends when you can barely pay your interest is... responsible? Fair enough FTX had many problems other than debt, but my point was on the danger of debt, and dodgy banks such as ANZ. In respect to holders I will abandon this thread because apparently I am talking nonsense and nobody agrees with me. so happy holding to all and I will be back to admit how wrong I was when VGH is trading at $5 in a couple of years time!

Please stay. It needs people like you to make tigers like me consider whether I have made a mistake or not.

From the accounts it appears to be that current operations generate enough cash to cover the interest payments 3 fold. Could be better and could be worse.
Calling ANZ dodgy needs some justification I feel.

Disc: Held FTX but only until the famous April 1st announcement, hold VGH.

[Lizard]

Sorry F.G., I didn't mean to offend. It never hurts to be cautious around debt since cashflows are inclined to be rather more volatile than interest payments. I always appreciate your input too. Having always had strong opinions about the ludicracies involved in FTX from float to finish, your comparison with VGH just touched a nerve.

Mamos, at the moment I have $2.30 in mind. But I will give it more thought if it gets close.

[winner69]

Bad for you guys I have had a look at VGH ..... recall I was the one who told Belg et al that they were throwing their money away following FTX (might have had good brands and all that but at the end of the day a company still needs to be economically viable)

FG is right on with some similarities with FTX

One essential financial measure all investors should use is the good old Altman-Z solvency thing.

Unfortunately VGH is in the FTX class (and not many companies ever get close to getting entry to that class) with a score less than 1.8 ..... meaning .....

Z-SCORE BELOW less than 1.80 - Probability of Financial embarassment is very high

It is all about ptobabilities ...... have been around long enough to actually observe many of these indebted companies in action ..... and the probabilities (risk reward or whatever) don't stack up with VGH

Having some intimate insights into how the guys at Fishers operate I am a little surpised that they have taken a position in VGH ..... however they obviously see some good prospects ,,,, and Fishers having a position is good for you guys already in as they will support the shareprice (at todays level at least?) ...... or bad news if they decide to bail out eh?

[Lizard]

Hi Winner. I have also found Altman Z useful since you introduced me to it. But I take it you have used the original formula for manufacturers rather than the modified version for non-manufacturers? Are you willing to run it again with the non-manufacturing formula?

http://www.nysscpa.org/cpajournal/old/16641866.htm

By my calculation, this is far less damning.

However, overall I do have some difficulty with using "total asset" based calculations on a company where goodwill forms such a major part of assets, as, in my mind, the implications of high goodwill needs to be looked at on a case-by-case basis. (In this particular case I am unable to decide whether similar levels of expenditure on goodwill should be considered necessary to support further growth or not).

[Flying Goat]

Hi All,


No offense taken Liz! That was just my drunken Friday night ramblings.

Thanks PT, you are right that the ANZ comments need justification and my main reasons are personal annoyance at three of their actions over the last year which probably seem petty but here goes:
- Putting FTX into receivership when their were rescue bids only days away
- buying direct broking and instantly putting up the fees
- making a low-ball bid to takeover E-trade right after I bought it with arrogant claim that "we are the natural owners of the business so you should all just surrender your shares" - do investors really seem that stupid? - as an aside apparently they have only acquired 1% since launching the bid a few months ago!! Hehe.

Regarding the debate on the Asset based valuation in my opinion Liz is quite correct in saying that case by case approach is needed, imo especially in high margin service industries, where most of the balance sheet is good will.

Never the less, agree with Winner69 on both counts that a) seldom is the case when a lot of good comes from a lot of debt and b) that Fisher and company, in my opinion are among the best investors in the country and this one does not stack up with their usual criteria?

PT, too early to worry though I think because on the bright side there have been numerous director buys over the last few months, and that, as we all know is a strong indicator that things are going well... In fact usually that is one of the first things that turns me on or off a stock.


Cheers,

FG

[mamos]

Why doesnt VGH raise equity finance rather than debt finance?
Obviously this would have been better when the share price was higher, but management must feel confident in their business model if they continue to raise finance through debt rather than equity?

[mamos]

Ruskin eyes off new optometry practices

http://www.theage.com.au/news/Business/Ruskin-eyes-off-new-optometry-practices/2007/04/20/1176697076450.html

Does anyone see this as a threat. I know VGH focusses on Ophthalmology rather than optomotry, but wouldn't the referrals for opthalmology work come from optometrists?

[winner69]

Lizard told FG to check the ROIC ..... but Lizard that ain't too flash for VGH either.

F06 ROIC at less than 8% probably not covering cost of capital

This year F07 based on top end forecasts (UBS) ROIC about 10% at best just covering cost of capital (little risk premium at these levels). Same forcasts and F09 possibly reaches 12% which not really enough to support the market value added implied in the current shareprice.

The amount of debt isn't really the issue, after all it is just over 50% of total debt & equity.

The real issue should be the returns that are being made on the $200M+ of invested capital.

This year F07 operating profit of $20-$21M isn't much is it. Using UBS forecasts F08 say $26M.

But as many have already said (as do UBS forecasts) they need to raise capital (from shareholders or borrow more) to drive this growth and the ROIC only marginally improves.

Like Lizard I would like to see where the organic growth is coming from ..... Lizard does make some good points over on that aussie site.

One day might be value in this sort of model ....

[winner69]

Mosteph ... difference essentially between our workings is did you use F06 numbers (?) and that my book says use total liabilities instead of debt in step 3

Never mind the exact figure ... we are pretty close anyway and the answer does say one needs to be weary (doesn't say they WILL go broke) but a fair degree of risk involved if things don't go right.

And of course you would say it is a 'bollocks ratio' wouldn't you ..... wouldn't want to cloud your optimism would we

Good luck

[Lizard]

Fair comments Winner. I was hastily attempting to suggest a comparison with a distressed FTX was unfair rather than praising VGH's ROIC though.

I like to find companies that are transitioning from a lower "business development stage" ROIC to a higher ROIC. It is possible this could be one, but I'm still reserving judgement.

[Flying Goat]

quote:Originally posted by Lizard

Fair comments Winner. I was hastily attempting to suggest a comparison with a distressed FTX was unfair rather than praising VGH's ROIC though.

I like to find companies that are transitioning from a lower "business development stage" ROIC to a higher ROIC. It is possible this could be one, but I'm still reserving judgement.


Liz, if you are interested in that sort of situation and have not already researched ITD, would suggest taking a look. Looking over past 3/4 years performance they are rising off relatively low roe, yet are very much in a position to lift that % figure considerably over next few years due to business development and finally reaching scale that will diminish fixed over head components etc...

FG

PS Sorry about going off topic!

[winner69]

quote:Originally posted by Lizard

Fair comments Winner. I was hastily attempting to suggest a comparison with a distressed FTX was unfair rather than praising VGH's ROIC though.

I like to find companies that are transitioning from a lower "business development stage" ROIC to a higher ROIC. It is possible this could be one, but I'm still reserving judgement.


Thought that but FTX ROIC was pretty good one year out from going broke (at least according to the accounts)

Like you I look to a increasing spread between cost of capital and actual returns ..... at the end of the day that implies increase EVA and that means increasing share price etc etc

[Flying Goat]

Winner,

Must confess my ignorance and say that had never heard of Altman_Z measure in the past but have been looking into it so thanks for the intro into a new financial analysis measure. For those too lazy to use a calculator there is spreadsheet at this website

http://www.rbcpa.com/invindex.html

All you need to to is plug in the numbers from the balanceSheet/profit&loss, and you're off...


FG

[winner69]

Another good analysis is to assess the sustainable growth rate based on ROE and %age of profits retained to fund growth ..... sustainable based on capital structure (without having to go back to shareholders)

Indications are that current divie policy is here to stay .... given that the sustainable growth rate for VGH is less than 10%.

This little peice of analysis says that VGR intend to grow (as they say they will) than both future divies are in danger and there is a pretty high probability that shareholders will be asked for more capital

Geez I know a lot about VGH now ..... passed their HO in St Kilda Rd the other day ..... next time in Melbourne will have to call in and find out just how they see their business model can generate profitable economic growth (not just the top line activities)

[Lizard]

quote:Originally posted by winner69

Another good analysis is to assess the sustainable growth rate based on ROE and %age of profits retained to fund growth ..... sustainable based on capital structure (without having to go back to shareholders)

Indications are that current divie policy is here to stay .... given that the sustainable growth rate for VGH is less than 10%.


Yes, I like this method and came up with a similar conclusion when I first started looking at VGH.

Is there a formal name or model for that kind of analysis? Having never studied accounting, I had to make up something from scratch to tell me what I wanted to know, so I'd like to compare it with a more expert version if it's out there!

[winner69]

quote:Originally posted by Lizard


quote:Originally posted by winner69

Another good analysis is to assess the sustainable growth rate based on ROE and %age of profits retained to fund growth ..... sustainable based on capital structure (without having to go back to shareholders)

Indications are that current divie policy is here to stay .... given that the sustainable growth rate for VGH is less than 10%.


Yes, I like this method and came up with a similar conclusion when I first started looking at VGH.

Is there a formal name or model for that kind of analysis? Having never studied accounting, I had to make up something from scratch to tell me what I wanted to know, so I'd like to compare it with a more expert version if it's out there!


Lizard

All about looking at cash sufficiency and often used as a strategic planning tool in diversified companies when assessing cash requirements of each business unit etc

I have found useful when assessing my own investments ..... even if just to check that companies financial policies match growth strategies etc

Apparently developed by one Manown Kisor ..... building on a Du Pont formula which shows the components of where increasing ROE is coming from

For whats it worth in VGH case (if the UBS forecasts are anything to go by) VGH is going to grow ROE mainly from expanding margins (not from other components like asset utilisation or increasing leverage)

[Lizard]

Thanks Winner. :)

Going to leave VGH on one side to brew for a while and apply myself to looking for something tastier.

[Snow Leopard]

I have taken my loss on this one :( and got out.

[mamos]

I think this may suffer more from tax loss selling too. ;(

[Flying Goat]

Noticed around 1,000,000 shares issued yesterday, anyone know what is up with that?

Thanks,

Mike

PS I thought Australian tax loss year end was not until end of June?

[mamos]

Yes. I meant in the period coming up to 30 June.


quote:Originally posted by Flying Goat


Noticed around 1,000,000 shares issued yesterday, anyone know what is up with that?

Thanks,

Mike

PS I thought Australian tax loss year end was not until end of June?

[winner69]

Close below 240 ..... even the IPO shares were 240 even though they opened at 300 odd on the market

Considering that VGH was over 500 a while ago this is some sell off isn't it

Surely Fishers aren't selling out?

[Flying Goat]

quote:Originally posted by winner69

Close below 240 ..... even the IPO shares were 240 even though they opened at 300 odd on the market

Considering that VGH was over 500 a while ago this is some sell off isn't it

Surely Fishers aren't selling out?


Winner,

That thought crossed my mind - this sell-off has their hallmark lack of subtlety!

;)
;)

[Lizard]

quote:Originally posted by Lizard
Mamos, at the moment I have $2.30 in mind. But I will give it more thought if it gets close.


Well that looked like a good bounce off $2.28. :)

[winner69]

Got your wish then lizard .... came pretty quick eh

Good luck ... already 5% up is good stuff

[Lizard]

Better be up front.

Since I had no spare cash in trading, I can only count this as a paper trade. Initial target $2.74 - exit if it re-visits $2.30 .... in case there is anyone out there foolish enough to take note of my posts :)

[Lizard]

$2.72 is close enough. If I actually held these, I'd probably sell the arrogant bounce trade about here.... 18% in a little over 2 weeks will do on a share I'm not totally convinced about for the long term.

[winner69]

Almost back to $3 again

Suppose Carmel is buying up again seeing they filed a SSH the other day with >5% of the company

Another instance of a good old beat up pushing the price down and more often than not a solid recovery

[Flying Goat]

Must admit that I did not expect the bounce to have so much... bounce!

[_Michael]

Anyone know what is up with VGH lately? Seems on a rapid descent when one would have thought it might have defense qualities amongst the turbulence??


Starting to look interesting at below $2.90 with the FY07 earnings turning out not too bad.

I fear bad news though - as sadly these small cap ASX stocks tend to shift well before the news!

[ratkin]

My guess , and it is only a guess is that people have the jitters regarding the large amount of debt the company has.
I have been out for some time now and have no intention of going back in.

Many companies with high debt are being caned , look at ABC learning (abs) as an example

[winner69]

Another 50 cents down since ratkin posted that a month ago and not that far off where it went doen in the great beat up last May

Makes you wonder what could be going on .... little in the way of news forthcoming.

Hope this isn't another impending Fisher disaster

[winner69]

founder retires s director after a strategic review that didn't seem to find a solution

Where to now is anybody's guess but the slide in the share price seems to continue

[soulman]

founder retires s director after a strategic review that didn't seem to find a solution

Where to now is anybody's guess but the slide in the share price seems to continue

The CEO is out now. Big drop today in a rallying market, a worrying sign.

Div yield above 10%. Who's still in this?

[winner69]

The CEO is out now. Big drop today in a rallying market, a worrying sign.

Div yield above 10%. Who's still in this?


18% down is a lot ... plenty of noise the last month .... strategic eview ... yes we are looking for buyers ... no we are not looking dor buyers .... timely that the strategy honch and founder goes ... the CEO moves on .... docters contracts under review ..... all this must be unsettling the markets


As you say high div yield ... PE down near 6 ..... makes 124 look really really cheap

Maybe punters worried about the $110m of debt

[winner69]

18% down is a lot ... plenty of noise the last month .... strategic eview ... yes we are looking for buyers ... no we are not looking dor buyers .... timely that the strategy honch and founder goes ... the CEO moves on .... docters contracts under review ..... all this must be unsettling the markets


As you say high div yield ... PE down near 6 ..... makes 124 look really really cheap

Maybe punters worried about the $110m of debt

Jeez I made those comments 3 months ago when the price was 124 ......... carried on down and was 41 the other day ........ and then wow out of the woodwork comes a non-binding conditional offer and VGH is the satr of the ASX ring 47% to 62 cents

So it was cheap at 40 odd in somebody's view ... suppose the problem is getting the time that is really cheap right to make the most of it.

Interesting that Criterion in The Australian still has an avoid on it ...

THE consolidator of eyecare practices has become the latest entity subject to the corporate version of will o' the wisp: a non-binding and conditional offer from an unnamed suitor.

Vision confirms several approaches, with the most promising entering exclusive negotiations. The emergence of a front-runner pushed Vision shares up 20c (50 per cent).

"These people have placed an appreciably higher value on the company than the share market has," said Vision chairman Shane Tanner. "This group we think has the right credentials and background mix."

Vision this year was blindsided by a management upheaval that saw the departure of CEO Neil Rodaway. Rodaway and the ophthalmic surgeon shareholders didn't see eye to eye, it seems.

Vision needs to issue shares to buy new practices, but with a lowly share price this means dilution for existing shareholders. Vision's 50 doctor "partners" account for 30 per cent of the register. A buyer would inject capital at an acceptable value and allow institutional holders to exit.

Vision's corporate, er, vision has been to tap into demand for cataract and retinal surgery across the older population, as well as refractive (laser) surgery across the younger set.

Vision is also eyeing plastic surgery as a way of soaking up spare capacity across Vision's 18 day-surgery centres.

Refractive surgery accounts for about 17 per cent of Vision's revenues, but is higher margin. Unlike the non-discretionary stuff, laser operations aren't government subsidised. In an economic downturn, beautiful folk won't shell out $5000-plus to throw away their specs.

Tanner expects demand to taper by 20 per cent this year, which is "not the end of the world". Overall, he says business is doing OK. At its October AGM, Vision flagged a 10-15 per cent EBIT cut this year, from last year's $32.3 million.

Tanner, who describes Vision shares as "massively undervalued", said last year's dividend payout of 13c a share -- equating to a 21 per cent yield -- remains "rock solid".

Criterion agrees the stock looks undervalued, but is wary of the generally poor record of professional consolidation plays. A takeover deal is no certainty and may take months to come to fruition. Avoid.

http://www.theaustralian.news.com.au/business/story/0,28124,24857494-23634,00.html

[winner69]

Another 18 months and things are even more desperate ... and latest bad news after market close as well

Blinded by the plight: further pain for Vision's shareholders
http://www.smh.com.au/business/blinded-by-the-plight-further-pain-for-visions-shareholders-20100626-zaxb.html

Looks like the model is broken

PE of 1 and a bit ... some would say CHEAP AS

[winner69]

Interesting looking back on this thread

Not much in the way of TA but the chart is a sad picture anyway and I don't think we need to be a Phaedrus to tell us that

The finanacial analysis discussions I had with Lizard et al did suggest that the VGH business model was financially not viable and not sustainable and that even back in 2008 there was ahigh degree of financial embarassment according to some basic financial ratios

Above all to me this is a reminder to me that looking at the real economics of a business - is it covering its cost of capital, what are implied growth rates, how is it capitalised etc etc (all mentioned on this thread) - is more important than a lot of the valuation ratios commonly used.

OK ... like TA alright saying this is hindsight but at the end of the day real fundamental economics of the business win out

[Lizard]

Thanks for bringing this one back up, Winner. Always interesting to pull out an old thread and measure the wisdom it may (or may not) have contained.

Those discussions stick out very strongly for me as helped form some of my strategies for analysis.

There is also an interesting wider issue of the "growth by acquisition" model which seems to come unstuck over and over again. Even those who seem to get it right for a long time seem to sometimes then take it one step larger and get it catastrophically wrong (ISF springs to mind).

Would be interesting to look for some that (at least so far) seem to have got it right... what is required to make a roll-up actually work?

[percy]

Thanks for bringing this one back up, Winner. Always interesting to pull out an old thread and measure the wisdom it may (or may not) have contained.

Those discussions stick out very strongly for me as helped form some of my strategies for analysis.

There is also an interesting wider issue of the "growth by acquisition" model which seems to come unstuck over and over again. Even those who seem to get it right for a long time seem to sometimes then take it one step larger and get it catastrophically wrong (ISF springs to mind).

Would be interesting to look for some that (at least so far) seem to have got it right... what is required to make a roll-up actually work?

I have watched EBO in NZ expand their business by "growth by acquisition" for a good number of years.MD Mark Waller seems to have a great understanding of his business,where he sees growth,and where the market is going ,the benefits the acquired company will bring to EBO,and the price he has to pay to acquire target company.EBO walk away from a great number of deals and spend a lot of time on due diligence.He said he had waited over 10 years to buy PNZ,so does not exactly rush into deals.
NPX I think had a record of getting 1 out of 17 wrong.Grew the company from a small NZ company to one which today is world wide.
EBO When Mark Waller first took over at EBO he had to make a lot of people reduntant.He said he found it a horrible experience putting off good people.May be this helps him when looking to acquire companies.The staff at EBO seem to take great pride working for EBO>

[winner69]

Jeez down to 16 cents .... obviously punters think this really stinks now

Wonder if the business/financial model is really broken?

[winner69]

Surely we are not counting this down to ZILCH are we

Hit 12 something today

[h2so4]

Surely we are not counting this down to ZILCH are we

Hit 12 something today

Ah .............one to short

[Lizard]

First step in the 100-day plan was to further align Dr remuneration with the performance of the company...

... given the performance of the company, I don't think this is going to fix the problem with loss of doctors...

Anyway, market still waiting for the bad news on impairments etc. Might give you a trade Winner... at this rate, they'll either be in the morgue or the share price will be throwing a relief party on the ann.

[COLIN]

Cor blimey! And to think that Carmel Fisher once held a chunk of these, based on their "superior skills at picking emerging leaders."
Please assure me that they no longer hold any - my wife has units in their Australian Growth Fund.

[winner69]

Colin .... June newsletter ...... "Last but not least small portfolio position (thankfully)Vision Group slipped (–35.4%) on three doctors not renewing their contracts."

Like the thankfully bit ..... only a small position so its OK eh

[winner69]

There was a SSH in April 09 raising Fisher stake to 9% ....6.3 m shares. Doesn't seem to be another SSH since


Were averaging down as bought from $1.50 to 50 cents odd

[winner69]

Marekt Cap now less than last years profit ....... Fishers seem to be the only substantial shareholder who hasn't bailed

Fishers must believe in the business model .... and the company

Like Carmel said in the Sunday paper ... its important to know when to bail out of an investment

[COLIN]

Believe it or not, I have been buying into this over the last couple of days, some at 14.5 and the rest at 16.5. Call me reckless, if you like, but something must be up, judging by the buying interest. Closed at 18.5, to be up 23% for the day.

[winner69]

Good one Colin .... me too

Was getting to the stage where shares were either worthless or worth heaps more than 14 cents

Its often these outfits priced for the doomsday scenarios that give you the biggest returns .... heck 70 cents is a 5 bagger .... and if Carmel gets her money back it will be a 10 bagger

[winner69]

What you reckon going on Colin ...... nearly doubled our money

Would have to think some people know something eh ... were we just lucky then

[Lizard]

Nice one Winner! Knew you could do it. (Where do you find time to work?!). :)

[COLIN]

What you reckon going on Colin ...... nearly doubled our money

Would have to think some people know something eh ... were we just lucky then

Winner: We would never admit to just being lucky, would we!

There seemed to be a very good reason for Carmel to hang in there. And as I watched the buying strength build up I convinced myself that "the trend was my friend."

A slight pullback now, but still up 35% for the day and plenty of buying interest remaining.

[h2so4]

Winner: We would never admit to just being lucky, would we!

There seemed to be a very good reason for Carmel to hang in there. And as I watched the buying strength build up I convinced myself that "the trend was my friend."

A slight pullback now, but still up 35% for the day and plenty of buying interest remaining.

What's wrong with lucky?:)

Congrats guys

[winner69]

Colin .... I have bailed out on this .... took the money and ran thinking the reply to the speeding ticket would spook many

Maybe it was all rumours .... who knows

But keeping a close eye on

[COLIN]

Colin .... I have bailed out on this .... took the money and ran thinking the reply to the speeding ticket would spook many

Maybe it was all rumours .... who knows

But keeping a close eye on

I'm going to stick around meantime. Relative buying interest is still strong.

[COLIN]

Colin .... I have bailed out on this .... took the money and ran thinking the reply to the speeding ticket would spook many

Maybe it was all rumours .... who knows

But keeping a close eye on

Well, Winner, there are still a lot of believers out there. I thought you were going to stick around until you had achieved that 10-bagger!

Quite a few thrills on this roller-coaster, these last few days. Hopefully no spills coming up!

[winner69]

Glad I was out before the trading halt

The announcement today - don't know if good or bad but doesn't seem to doing much to fix the business model ... except making it more expensive to run at first glance

Market didn't like it .... but heck still making money .... if you forget about the $66m impairment charge

But VGH back on the watch list to see what pans out (on the chart anyway)

[COLIN]

Have been out of town for a few days and not able to react quickly enough to this latest development, but think I will stay with it for now. There still seem to be a lot of would-be buyers around, and I believe the potential upside is greater than the downside - but perhaps I am just kidding myself, and should be content to just take the lower profit of 40%.

[COLIN]

Have been out of town for a few days and not able to react quickly enough to this latest development, but think I will stay with it for now. There still seem to be a lot of would-be buyers around, and I believe the potential upside is greater than the downside - but perhaps I am just kidding myself, and should be content to just take the lower profit of 40%.

Following on from the above: I did sell out shortly thereafter. Congratulations to all those who have held on, and were able to benefit from today's surge, following the SSH from Primary Health Care.

[winner69]

Colin .... bet you glad like me we didn't stick around to see whether the 10 bagger eventuated

Never really got out of the starting blocks did it .... prob shareprice stuck at lowe levels for years to come until a new business model is invented

[COLIN]

Colin .... bet you glad like me we didn't stick around to see whether the 10 bagger eventuated

Never really got out of the starting blocks did it .... prob shareprice stuck at lowe levels for years to come until a new business model is invented
Yes, a bit of a sorry sight W69. I wonder if Carmel Fisher still holds a few. Surely not.

[winner69]

Yes, a bit of a sorry sight W69. I wonder if Carmel Fisher still holds a few. Surely not.

Think they still have 6% odd of the company ,,,, value shrinking by the day eh