Healthcare Companies - Low EV < $15m - multibagger potential?

[shasta]

I have removed MDG, MLA, CAJ, & PGC from the list as these have already been discovered & have threads.

In order of lowest EV to highest:

Profitable/EPS Accreditive based on last year financials:

1. PHL - PEARL HEALTHCARE LIMITED

MCap @ $0.09 = $1.21m - cash @ 31/12 ($0.15) EV = $1.06m
What do they do: Dental laboratory services
Options Listed: No
Most Recent Presentation: http://stocknessmonster.com/news-item?S=PHL&E=ASX&N=529507

2. LER - LEAF ENERGY LIMITED

MCap @ $0.15 = $4.04m - cash @ 31/12 ($1.54) EV = $2.50m
What do they do: Research, development and commercialisation of plant based technologies and products for the biofuel, industrial and medical research markets
Options Listed: No
Most Recent Presentation: http://stocknessmonster.com/news-item?S=LER&E=ASX&N=226486

3. LBT - LBT INNOVATIONS LIMITED

MCap @ $0.073 = $7.25m - cash @ 31/12 ($4.16m) EV = $3.09m
What do they do: Development of technology for use in automation of microbiology laboratory processing.
Options Listed: Yes
Most Recent Presentation: http://stocknessmonster.com/news-item?S=LBT&E=ASX&N=181931

Unprofitable/Non EPS Accreditive based on last years financials

4. CTE - CRYOSITE LIMITED

MCap @ $0.11 = $5.13m - cash @ 31/12 ($2.40m) EV = $2.73m
What do they do: Biological storage and sample management service, including: the collection, processing and storage of cord blood stem cell
Options Listed: No
Most Recent Presentation: http://stocknessmonster.com/news-item?S=CTE&E=ASX&N=613799

5. CZD - CALZADA LIMITED

MCap @ $0.034 = $11.79m - cash @ 31/12 ($8.10m) EV = $3.69m
What do they do: 100% ownership of PolyNovo Biomaterials Pty Ltd and Metabolic Pharmaceuticals Pty Ltd
Options Listed: No
Most Recent Presentation: http://stocknessmonster.com/news-item?S=CZD&E=ASX&N=523725

6. OIL - OPTISCAN IMAGING LIMITED

MCap @ $0.062 = $8.04m - cash @ 31/12 ($2.00m est*) EV = $6.04m
What do they do: Research and development of a High Magnification Endoscope for clincial diagnosis and research;
Options Listed: No
Most Recent Presentation: http://stocknessmonster.com/news-item?S=OIL&E=ASX&N=346497

7. GLH - GLOBAL HEALTH LIMITED

MCap @ $0.03 = $8.16m - cash @ 31/12 ($0.72m) EV = $7.44m
What do they do: Providing healthcare software and services for hospitals, clinicians and consumers.
Options Listed: No
Most Recent Presentation: http://stocknessmonster.com/news-item?S=GLH&E=ASX&N=346349

8. PHG - PULSE HEALTH LIMITED

MCap @ $0.041 = $10.37m - cash @ 31/12 ($1.07m) EV $9.30m
What do they do: Owning and the operation of private hospitals, home nursing services and nursing agencies
Options Listed: No
Most Recent Presentation: http://stocknessmonster.com/news-item?S=PHG&E=ASX&N=516996

9. RHT - RESONANCE HEALTH LIMITED

MCap @ $0.031 = $11.19m - cash @ 31/12 ($1.67m) EV $9.52m
What do they do: Develops unique quantitative MRI image analysis technologies for the diagnosis and monitoring of human disease.
Options Listed: No
Most Recent Presentation: http://stocknessmonster.com/news-item?S=RHT&E=ASX&N=515635

10. AMT - ADVANCED SURGICAL DESIGN & MANUFACTURE LIMITED

MCap @ $0.30 = $10.59m - cash @ 31/12 ($0.70m) EV $9.89m
What do they do: Developer and manufacturer of prosthetic implants and medical devices
Options Listed: No
Most Recent Presentation: http://stocknessmonster.com/news-item?S=AMT&E=ASX&N=624005

11. HTX - HEALTHLINX LIMITED

MCap @ $0.068 = $10.71m - cash @ 31/12 ($0.41m) EV $10.30m
What do they do: Identification and development of novel, non-invasive, serum and plasma based multi marker diagnostics
Options Listed: Yes
Most Recent Presentation: http://stocknessmonster.com/news-item?S=HTX&E=ASX&N=344552

12. ACG - ATCOR MEDICAL HOLDINGS LIMITED

MCap @ $0.10 = $13.41m - cash @ 31/12 ($2.09m) EV $11.32m
What do thy do: Development and marketing of the SphygmoCor device used for cardiovascular patients
Options Listed: No
Most Recent Presentation: http://stocknessmonster.com/news-item?S=ACG&E=ASX&N=624202

13. HCG - HELICON GROUP LIMITED

MCap @ $0.056 = $13.95 - cash @ 31/12 ($1.73m) EV $12.22m
What do they do: The licensing, distribution and/or manufacturing of pharmaceutical and healthcare products
Options Listed: No
Most Recent Presentation: http://stocknessmonster.com/news-item?S=HCG&E=ASX&N=522220

From the unprofitable list CZD & PHG interest me, along with LER off the profitable list

[percy]

Thank you for your great research shasta.I have not heard of any of them so look forward reading their presentations.

[drillfix]

Hi Shasta,

Thanks heaps and your efforts are acknowledged here.

Wish I knew a bit more about the industry itself as there is a lot of reading there to do by the looks of things. Am hoping and look forward to any comparisons that really stick out from others on this industry.

Cheers again.


add/edit

PS, Hey , I just realised that HTX is on that list. and I used to hold HTXO with a small portion of Options that are expiring next month, which I had picked up for 0.008c ages ago and just I sold them for last week for 2.2c so I got a 2.5 bagger out of it :)

[shasta]

Hi Shasta,

Thanks heaps and your efforts are acknowledged here.

Wish I knew a bit more about the industry itself as there is a lot of reading there to do by the looks of things. Am hoping and look forward to any comparisons that really stick out from others on this industry.

Cheers again.


add/edit

PS, Hey , I just realised that HTX is on that list. and I used to hold HTXO with a small portion of Options that are expiring next month, which I had picked up for 0.008c ages ago and just I sold them for last week for 2.2c so I got a 2.5 bagger out of it :)

Using the ASX watchlist i can keep a track of 20 stocks at a time - so ill update the spreadsheet as/when i find other healthcare related stocks & will track the 20 with the lowest EV & update the thread. (I do this with the low EV resource stocks, once they run past $20m M Cap, they go off the list, so im always replacing them)

There are some real oddball companies in there & i've used a $15m MCap cut off, with relatively tight capital structures to try & find those with the same kind of upside as the likes of MLA, CAJ, PGC, & MDG.

Hopefully the descriptions are good enough to give people a lead into certain areas within healthcare, ie PHG run hospitals

[steve fleming]

8. PHG - PULSE HEALTH LIMITED

MCap @ $0.041 = $10.37m - cash @ 31/12 ($1.07m) EV $9.30m
What do they do: Owning and the operation of private hospitals, home nursing services and nursing agencies
Options Listed: No
Most Recent Presentation: http://stocknessmonster.com/news-ite...E=ASX&N=516996 (http://stocknessmonster.com/news-item?S=PHG&E=ASX&N=516996)


From the unprofitable list CZD & PHG interest me, along with LER off the profitable list

Impressive work Shasta, and some realy good leads there thanks.

PHG I agree is interesting, and one I have been keeping my eye on for a while.

With forecast revenue of about $40m for FY11, it has the size to demand a re-rate once its financing issues are sorted.

However too risky for me at the moment, given their debt levels and financing problems.

Though PHG has $11m of debt, so its EV is closer to $20m, rather than $9m.

[shasta]

Yahoo finance has a pretty good portfolio/watch list service if you want to track everything. I have sector watch lists with hundreds of stocks covering the all ords and you can set it up to show deviances from MA etc, and it gives you the ability to see the health of an entire sector at one glance. Also good at tracking ST competition results :-)

Thanks to those who have correctly pointed out, that some of these companies actually do have some debt/access to loan facilities, so please do not take my figures as gospel, for those short of funds please refer to more recent anns, hopefully the above leads aren't too distorted from there actual situation.

GLH -Half Year Update:

http://stocknessmonster.com/news-item?S=GLH&E=ASX&N=350485

Summary
http://stocknessmonster.com/news-item?S=GLH&E=ASX&N=350486

[shasta]

From the list above...

CZD - Half Year Report

http://stocknessmonster.com/news-item?S=CZD&E=ASX&N=529983

Hopefully they can increase there revenue & margins & move towards profitability in the 2nd half of the year, even though the full year looks like another substantial loss

Plenty of cash though

[buns]

Impressive work Shasta, and some realy good leads there thanks.

PHG I agree is interesting, and one I have been keeping my eye on for a while.

With forecast revenue of about $40m for FY11, it has the size to demand a re-rate once its financing issues are sorted.

However too risky for me at the moment, given their debt levels and financing problems.

Though PHG has $11m of debt, so its EV is closer to $20m, rather than $9m.

I’ve made an entry into PHG.

Since Shasta’s list was published they released a solid half year result and the new directors (CEO joined October) have been buying on market.

EBITDA up 50% on prior year to around $2m - The whole P&L is performing better, revenue up to $20m HY (growth across all BU’s), costs coming down..

NPAT up 165% to about 400k – Most of this relating to one off’s (impairment and c note exp), but good news looking forward is financing costs coming down and as is D&A.

Apparently Jan/Feb went great guns, and they are expecting more of the same leading to the full year result. I’m expecting them to come in ahead of forecast.

I see no reason why this revenue growth can’t grow further and as a result PHG should be able to pay down this hefty debt which cripples the BS.

At FY I'll make another assesement on whether I think PHG can maintain this debt (dosent rollover till Dec 2012), but untill then and after the FY announcement I expect a small re rating here.

[buns]

Still digging into PHG.

Not a great margin story here, most of the expenses incurred are linear with the revenue.

The personnel related expenses (just taking heads and proff fees) remains at 63% of revenue YOY. I need to look around (Ramsey) to see what the norm is, but this is a huge chunk of EBITDA.
Sustainable for a company with a strong BS, but not one like PHG.

They aren’t really in the field where you can streamline resources/cut salaries so I’m thinking the big way out of this mess is to cash up low margin hospitals (has kind of started), which in turn can go towards Debt. The other way out is obviously acquiring more hospitals with higher margins, yet they are in no position to do this.

This hints a slow grind to any substantial growth for PHG, but also demonstrates a good lesson for other micro cap health coy’s who grow via acquisition and are heavily leveraged (CAJ, PGC)

Anyway – I’m holding, upside is good here. H2 is hinted to be strong, so thinking there is possibility to benefit at least in the short term from 4c

[shasta]

Still digging into PHG.

Not a great margin story here, most of the expenses incurred are linear with the revenue.

The personnel related expenses (just taking heads and proff fees) remains at 63% of revenue YOY. I need to look around (Ramsey) to see what the norm is, but this is a huge chunk of EBITDA.
Sustainable for a company with a strong BS, but not one like PHG.

They aren’t really in the field where you can streamline resources/cut salaries so I’m thinking the big way out of this mess is to cash up low margin hospitals (has kind of started), which in turn can go towards Debt. The other way out is obviously acquiring more hospitals with higher margins, yet they are in no position to do this.

This hints a slow grind to any substantial growth for PHG, but also demonstrates a good lesson for other micro cap health coy’s who grow via acquisition and are heavily leveraged (CAJ, PGC)

Anyway – I’m holding, upside is good here. H2 is hinted to be strong, so thinking there is possibility to benefit at least in the short term from 4c

Buns

Have you had a look at MLA, i see this as a close comparison to PGC & CAJ

Once the market closes each Friday, i'll update the position of the companies mentioned in the original post

[Entrep]

Anyone following RHT? Two interesting announcement with Pfizer and Novartis lately. A man that MC is low, has taken a hammering the last week!

[drillfix]

Anyone following RHT? Two interesting announcement with Pfizer and Novartis lately. A man that MC is low, has taken a hammering the last week!


Hi Entrep,

I dont follow RHT, but I did buy some yesterday at 2c and just missed my fill at 1.9c

By no means am I a health care knowledge buff, but from the recent fall I decided to park some money from watching the previous decline.

To me, the hourly is about to turn upwards so tomorrow may start to see some volumes setting in again and now is the time to buy, IMO.

(adding to the fundamentals of course which also sound great).

[percy]

Hi absolut advance this thread should be of interest to you.

[percy]

Cheers Percy it is, hadn't seen this one.

good stuff

(although bit spec y, under 15 million market cap, not some thing i personally would bet on for long term viability)

AA
AA,
EBO in NZ with market cap of $370 or more had a market cap of approx $2.5 mil in 1991.So there is hope.!!!
I have a few shares in PGC,some PGCOA.This company is doing the right things.
I also have some CAJ,which again is doing the right things.
BUT the winner will be MLA.The reason being I don't have any of their shares.!!!!!! lol.

[buns]

Good timing bringing this one up again

PHG, seems to be in takeover mode hence the large rise over the last wee while.

I sold out a few months ago for a loss...

Anyhow - Good sign for the small cap healthcares as a whole!

[percy]

There is always hope Percy,
Im not suggesting its a bad thing to invest in, I seriously wouldn't know,

id just rather a proven company model when holding "long term" in anticipation of a macro growth environment for the sector driven by a bubble of ageing population like the baby boomers.

If the sector booms even large companies like COH will still out perform to a large extent. ( not that Im suggesting buying or not buying COH, just an example)

I found with investing slow and steady the safer way in big solid companies works for me, trading though is different , its all in and out of the specs and high risk companies but better return for time.

What ever works for you, each to their own.

Shasta is very good at picking good value companies so it wouldn't surprise me if many outperform, just be prepare for the hic cups now and then.

AA

AA.
I agree totally with the way you invest,I have large value holdings in EBO and RYM.Smaller holding in ABA [nz] and an interesting holding in PAZ [nz unlisted market].
My holding in PGC [aussie] has grown,and will grow when I convert my options in May next year.I have lost money in the past on small Aussie bio companies and will not buy into that sector again.The likes of Blackmores is different as they are an excellent company.I find the good Aussie health sector companies trade on very high multiples and very low dividend yields.I buy a small parcel of shares in the specs,and if they do things well,I add to my holding.PAZ has grown without coming back to shareholders for more cash. COH has been,and is a great story,unfortunately I have never held.

[percy]

AA.
I think I am trying to tell my grandmother how to suck eggs,but here goes.I look to see current assets far exceed current liabilities,they are cash flow positive,and do not carry too much debt.Then if they do something I do not like,or have a profit down grade I sell straight away.I held ELX which came up with a poor result,so were sold that day.I try to buy for the long term,but sell if I get it wrong.I like to add to my holding if I get it right.In NZ I look growth and dividends,but in Aussie I am looking for growth,as dividends from Aussie do not carry inputation credits for NZ tax. Blackmores, I do not hold,but would be a company well worth your time to research.

[Entrep]

AA,
EBO in NZ with market cap of $370 or more had a market cap of approx $2.5 mil in 1991.So there is hope.!!!
I have a few shares in PGC,some PGCOA.This company is doing the right things.
I also have some CAJ,which again is doing the right things.
BUT the winner will be MLA.The reason being I don't have any of their shares.!!!!!! lol.

MLA has come off quite a bit lately - still not tempted to purchase?

[percy]

MLA has come off quite a bit lately - still not tempted to purchase?

Yes I am tempted,but at present I am trying to hold a little cash.I have them on a watch list.
Could not help myself yesterday,added to my DGR holding.Go to DGR thread and read shasta's update,and you will see why.

[buns]

MLA has moved but is still far too expensive for my liking. Do your valuations, don’t follow trends!!

I don’t mind buying these small caps; however they have plenty of risk so you should require a hefty margin of safety on every purchase. MLA has all this risk yet is priced like a large cap.

DGR has fallen off the cliff hasn't it? I'm holding it but regretably. I feel those EV negative type companies (MLM, CFE, HRS) trade at those large discounts for good reason and will continoue to do so. They attract the novice investor (me a year ago) who thinks they can value a company by simply adding up its assets.

Percy do you own every single stock on ST?

[percy]

Percy do you own every single stock on ST?

Just about.!!!! I did not mention it,but I lost money on a small drug company a few years ago that the chairman on MLA was also the chairman of,so stayed away.
With DGR I am keen to get in on the float of Armour Energy.

[4be]

Anyone follow Optiscan?

They announced at their AGM in November that a potential deal could be annouced early 2012.

Price has just broken through 52 Week High.

[NZSilver]

Anyone still holding or looing into PHG (pulse Health) MCap now 50million, there has been changes as of late, still under the radar, P/e approx 19, debt around 19.5 mil. Cashflow +ve, revenue growth

[born2invest]

Anyone still holding or looing into PHG (pulse Health) MCap now 50million, there has been changes as of late, still under the radar, P/e approx 19, debt around 19.5 mil. Cashflow +ve, revenue growth

I looked into buying Pulse Health Group (PHG) around 2 years ago. I had always liked Ramsay Healthcare (RHC) and saw this as a smaller scale, but similar company. There were too many uncertainties for me to invest into it but I always look at it again every now and then. I see they have been going quite well as of late. No regrets on not buying though.

[born2invest]

Another company to look into that wasn't on the list is:

Asian American Medical Group (AJJ)

Not really my thing, but I remember reading a few years of their annual reports a year or so ago and this thread just jogged my memory.

[babymonster]

Good list, most of them are doing well, sp side at least.

[Bigeasy]

Good list, most of them are doing well, sp side at least.

Anybody holding or interested in MLA now? They have gone through a bit of restructuring in the last six months - a merger and share issue and had a few cashflow issues but seem to have stabilised and now looking ahead with a changed management/governance board with more focus on future direction. Their products in animal and human health look promising.

[babymonster]

This one actually make profit. Good one.
Anybody holding or interested in MLA now? They have gone through a bit of restructuring in the last six months - a merger and share issue and had a few cashflow issues but seem to have stabilised and now looking ahead with a changed management/governance board with more focus on future direction. Their products in animal and human health look promising.