ABA Abano health

[forest]

And I really like how they've ditched their other businesses like radiology and audiology to focus just on dental.
Shows conviction of their strategy.

I agree with you JayRiggs, last 3 years Debt to Equity has reduced from 99% to 50%.
Dividend has been going up and we have a more focused company.
Net margin was also higher in 2H18 than in the prior 3 six months periods.

[zigzag]

Does anybody has an idea why share price is going down the hill despite record profits, more clinics bought in AUS and NZ? is it a good buy at $8.20 or share bound down hill?

Could be one holder selling a large parcel of shares? There has been fairly high volume in the last few weeks, and because ABA is not a highly liquid stock this has been putting downward pressure on the shareprice. At least the selling is being absorbed, albeit at a discount.

[KJ]

Suggest you read Percy's last post as it is very relevant.
ALSO
(1) NPAT includes profit on sale of subsidiary-2.1m.For comparison purposes you need to exclude this & adjusted NPAT is $10.7m,down 4%
(2) 4.2m new shares were issued to fund its purchases of new businesses.Very importantly EPS has fallen 20% from 51.8 to 41.7
(3)This puts the PE on 21
(4)In addition to the share issue it received 17m from the sale of its subsidiary-cash on hand at year end was only $7-where is future funding coming from?
(5) Goodwill in BS stands at $227m.It has paid roughly $1m goodwill per business purchased.Each business contributes approx $47,000 npat per annum
so it will take about 20yrs profits to cover the goodwill.
(6) In the last yr it paid $38m in goodwill for 19 businesses.
(7) ROE was 7.7%
It really needs to be achieving a much better profit for each practice.The worry could come with goodwill writedowns for non performing businesses.Goodwill in
the books exceeds Equity.
Just my thoughts.

[BlackPeter]

Lacking any other detrimental company specific information would I say the chance that Abano is close to an (at least) local minimum is higher than the chance this drop continues unabated - i.e. no matter whether we see it as sell or not - now might not be the best time to do so.

just to tie up- this thread ...

when I wrote above the SP was in the 8.20'ies. Now its in the 8.70'ies - and it looks like the upwards movement went out of puff.

Of course - it could gain steam again, but so far it looks like the MA100 is a quite effective resistance level.

I probably don't need to spell out what this means ...

GLTAH ...

[Entrep]

This is looking like interesting value again, had written it off earlier this year but could be a nice share to add to the dividend portfolio around these levels...

[peat]

Fisher Funds have dumped according to headline at NBR

[BlackPeter]

This is looking like interesting value again, had written it off earlier this year but could be a nice share to add to the dividend portfolio around these levels...

Forward PE = 14.1; forward CAGR 14.9; PEG 0.94; Not too bad, but this is obviously only if we believe the predictions of the analysts.

On the other hand - EPS for this company is in the past wildly jumping around - i.e. not sure what the past says about the future. In general - companies which base their business model on buying and integrating smaller business tend to buy over time dearer and dearer which tends to negatively impact on their own EPS growth rates.

I'd see ABA around $8 as fairly valued ... not really a bargain yet. Ah yes - and the TA looks quite ugly. Difficult to pick bottoms. But sure - there well may come a time when it is a buy :

[James108]

I keep an eye on this as well, will be interested if they start to turn Australia declining sss around.

[winner69]

......
....companies which base their business model on buying and integrating smaller business tend to buy over time dearer and dearer which tends to negatively impact on their own EPS growth rates.

I'd see ABA around $8 as fairly valued ... not really a bargain yet. Ah yes - and the TA looks quite ugly. Difficult to pick bottoms. But sure - there well may come a time when it is a buy :

Been religiously updating the financials in my model and not much improves

All the extra capital not really generating much more in the way of returns. ROIC remains 6%/7% range and doesn'y cover their cost of capital

As such I would consider $8 more than 'fairly valued' .....and some way off being a 'bargain'


Buy hype might take them higher in short term

[777]

Fisher Funds have dumped according to headline at NBR

And Harbour have upped their holding.