Q: Hey Peter & Team,
One of the news letters I receive had this to say about PHM. To me Fabrice Taylor makes much sense and goes directly to some of your comments on today's answer in our forum.
Post it if you think it worthy of such...
I spent two hours with Michael Dalsin (of PHM, Convalo and Inspira fame) in Los Angeles last week and got a very good update. I also spoke to him today.
PHM stock, we can see, is not immune to the laws of valuation but I took a small piece of the $1.50 financing (despite having sold all my stock at $1.20 after a 2,400% return). I wouldn't call it a value stock here but I note that insiders were net buyers of stock lately and the story is better today, so I think you can put bids in and let the sellers come to you.
Using existing cash (i.e. not including the financing) I believe the company can get to EBITDA (through acquisitions) that would give it a valuation of about 15 times today, which, again, is not a value stock but isn't as crazy as 30 times.
I think part of the selling is from investors who bought the $1.50 financing, so they’re selling their free-trading stock. That suggests that $1.50 should be roughly the floor.
The oil price also hurts PHM and other health stocks when it rallies, as it draws investment money out of health care and back into energy shares (and pushes the Canadian dollar higher, which cuts into PHM’s profits since it earns money in USD.) But I don’t think the Saudi plan was to cut the price of oil in half for six months. It was, and is, to crush the U.S. shale industry, and that still hasn't happened so I don’t expect strength in oil prices.
There were also rumors that PHM would be banned from cross-selling, which is simply not true. Management would have heard of any move in this direction before the public (or any short seller) and they have not as of today.
Much of the same holds true of Convalo. Put in bids and let sellers come to you at as low a price as possible.
as always... thanks for all you do
Gord
One of the news letters I receive had this to say about PHM. To me Fabrice Taylor makes much sense and goes directly to some of your comments on today's answer in our forum.
Post it if you think it worthy of such...
I spent two hours with Michael Dalsin (of PHM, Convalo and Inspira fame) in Los Angeles last week and got a very good update. I also spoke to him today.
PHM stock, we can see, is not immune to the laws of valuation but I took a small piece of the $1.50 financing (despite having sold all my stock at $1.20 after a 2,400% return). I wouldn't call it a value stock here but I note that insiders were net buyers of stock lately and the story is better today, so I think you can put bids in and let the sellers come to you.
Using existing cash (i.e. not including the financing) I believe the company can get to EBITDA (through acquisitions) that would give it a valuation of about 15 times today, which, again, is not a value stock but isn't as crazy as 30 times.
I think part of the selling is from investors who bought the $1.50 financing, so they’re selling their free-trading stock. That suggests that $1.50 should be roughly the floor.
The oil price also hurts PHM and other health stocks when it rallies, as it draws investment money out of health care and back into energy shares (and pushes the Canadian dollar higher, which cuts into PHM’s profits since it earns money in USD.) But I don’t think the Saudi plan was to cut the price of oil in half for six months. It was, and is, to crush the U.S. shale industry, and that still hasn't happened so I don’t expect strength in oil prices.
There were also rumors that PHM would be banned from cross-selling, which is simply not true. Management would have heard of any move in this direction before the public (or any short seller) and they have not as of today.
Much of the same holds true of Convalo. Put in bids and let sellers come to you at as low a price as possible.
as always... thanks for all you do
Gord
