Does anyone have a view on this company? I see that the price ended last week at $5.95 per share, and has a dividend yield of over 6% (according to directbroking).
which almost certainly has to mean they are a better buy now than then
one needs to consider the ongoing viability of the business model namely commoditizing and franchising dentistry. at some point the easy fruit will have been taken and growth will be harder to obtain.
A lot of capital required for acquisitions,which have a very poor return on capital..
Very little growth from each practice.
Revenue growth is mainly driven by acquisitions.
I do not think dentist have "pricing power".
A visiit to the dentist is easily put off when times are tough.
Australian mortgage requirements,ie a stop to interest only loans will cause hardships.
Increasing mortgage interest rates will work against ABA's clients too.
Interesting question is - is there any price where you think it is a buy again? I guess in a way they do remind me at the (Australian) Greencross (vetcare and animal food). They had an amazing growth phase fuelled by lots of aquisitons - the shareprice boomed and peaked above $10. They made the cardinals mistake most growth by aquisition companies do at some stage - they started to pay too much for additional growth and market realised at that stage that they are in a bubble and any additional aquisition will reduce PE ratio. Shareprice crashed subsequently down to something like $3.70 ... and then somebody came and took the company over (around $5.50).
Realistic scenario for ABA as well?
Last edited by BlackPeter; 26-03-2019 at 09:04 AM.
----
"Prediction is very difficult, especially about the future" (Niels Bohr)
Interesting question is - is there any price where you think it is a buy again? I guess in a way they do remind me at the (Australian) Greencross (vetcare and animal food). They had an amazing growth phase fuelled by lots of aquisitons - the shareprice boomed and peaked above $10. They made the cardinals mistake most growth by aquisition companies do at some stage - they started to pay too much for additional growth and market realised at that stage that they are in a bubble and any additional aquisition will reduce PE ratio. Shareprice crashed subsequently down to something like $3.70 ... and then somebody came and took the company over (around $5.50).
Realistic scenario for ABA as well?
On the other hand could go the Evolve way
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
A few months ago they said that they acquired 14 practices in H1 and they would contribute $6m extra annualised ebitda
Appears not ...or if they are the existing practices are going back fast
One good thing as acquisitions canned for a while they say (hint) no need for a capital raise.
Would be surprised if share price $4 something soon.
"and a lift in revenue per clinical day"..?
Try charging customers more per visit,when Aba are known as charging plenty will not work.
Getting dentists to see more customers per day will not work as they have trouble keeping their existing customers,let alone attracting more customers.
Try "add ons" does not work,as customers are not stupid.
Really think their business model is suspect,therefore it would be hard to value the business.
The days of paying too much for "roll outs" are well past us.
They were correct to advise there will be no further capital raise.
Time has shown the money Aba were making was in hearing.Since sold.
Bookmarks