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Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: Peter, there is some current speculation regarding US health care stocks and this US Supreme Court Ruling which will apparently happen this month which could throw a monkey wrench into the health care momentum. IE. King Versus Burwell. Could you comment on the potential impact this decision might have on health care stocks generally and patient home monitoring specifically.
Read Answer Asked by Jim on June 08, 2015
Q: What do you think are the implications for the coming King vs. Burwell US Supreme court verdict on PHM's business model? I haven't heard to much about this case but it appears relevant to PHM as I think they target highly subsidized indications with large reimbursements. Please correct me if I am wrong.

Which side is better for PHM and do you think they will win?

Thanks
Read Answer Asked by Scott on June 04, 2015
Q: Hello Peter,
If I read correctly from the various message boards, TD sold a lot of shares of PHM and since than the stock has not recovered. PHM continues to build a base around the 1.5 range. Recently on BNN, there has been positive comments on PHM with a price target in the 2.25 range and yet the stock has not moved. Their recent financing closed and I was expecting the price to move higher. Are you able to shed light on this please? With respect to FFH, the stock just keeps getting punished. Any comments and are you able to provide the company's PE ratio as well as the ROE please as yahoo, and google do not seem to track the numbers the same. Thank you.
Read Answer Asked by umedali on May 14, 2015
Q: PHM ANNOUNCES EXECUTION OF LETTER OF INTENT TO ACQUIRE A NATIONAL BUSINESS HEADQUARTERED IN THE SOUTHEAST WITH $40 MILLION IN ANNUALIZED REVENUE AND $13 MILLION IN ANNUALIZED ADJUSTED EBITDA

Q: IS THIS GOOD ? ARE THEY GETTING AHEAD OF THEMSELVES ? CHEWING OFF MORE THEN THEY CAN EAT?
OR HAVE THEY THE CAPACITY TO INTEGRATE SO MUCH SO FAST
THANKS
Read Answer Asked by JOSEPH on April 29, 2015
Q: There seems to be a lot of interest in this company from subscribers and I suspect this company has a lot of coverage by institutions and professional investors. My question is, if that is the case, is this a company that retail investors should invest in? What edge can they have? It seems to me that one would only want to invest in small or micro cap companies if one stood a good chance of making outsized gains. That typically means buying these companies before they get noticed.
Read Answer Asked by Murray on April 29, 2015
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
Read Answer Asked by Gord on April 27, 2015
Q: Patient home monitoring and NHC hit new highs on Monday and by Wednesday they had pulled back approximately 25%. ITrade indicated that companies like such as those that grow by acquisition - there are pros and cons of companies that grow by acquisition. A recent BNN guest indicated there are smart money people like people who appear on BNN and have newsletters. Then there are dumb money people -- (me) -- who watch BNN for advice and subscribe to the newsletters. Bruce Campbell BNN regular from Alberta has recommended these practically every time he has been on. Would the smart money people have been getting out of these positions when they hit new highs a couple of days ago and the dumb money people like me still have them?
Read Answer Asked by Dennis on April 27, 2015
Q: Hi 5i: How far will you let winners run in the Growth Portfolio before rebalancing? Given the higher risk context generally, will you tolerate more concentration, resulting from the odd holding going on a tear, or will you follow a discipline to keep your position sizes within strict limits? Thanks!
Read Answer Asked by Lance on April 19, 2015
Q: Peter, I was fortunate to get into PHM at .26C. When it reached .52C I sold half my position and considered anything else to be "gravy" and vowed to myself never to touch that stake until one day they were sold, or became the darling of Nasdaq.
Well its up 119% YTD and now makes up 7.5% of my portfolio. It makes me happy and nervous all at the same time.
Should I reconsider my vow, or put my bigboy pants on and just hang on for the ride?
Read Answer Asked by Barry on April 19, 2015
Q: I have a question regarding the recently upsized bought deal of $58.5M. In the past, I have felt as though many "upsized" deals come about due to external demand and promotion by the underwriting syndicate to company management. This can be a negative as the incremental capital raised likely has no immediate place to go(otherwise, why not start at the higher sized offering to begin with...), and this can result in shareholder dilution.

I realize PHM is a role up company and currently on an acquisition spree so this may not apply to them but what do you make of this increased deal size? I worry about all the extra dilution.

Thanks.
Read Answer Asked by Scott on April 13, 2015
Q: To me, it appears both PHM and NHC pre released very good quarterly numbers. What did you think of them?

Also I remember 5i being hesitant on NHC due to past experience with management. Has their recent success tempered your concerns? To me it still seems quite cheap relative to the sector (based on forward estimates).

Thanks
Read Answer Asked by Scott on April 10, 2015
Q: I'm up over 300%. It was a very conservative buy in the first place, so even with gain, it is a reasonable position in my portfolio. I read a report this weekend that they may not be completely forthcoming with their income statement, that Net Operating Profit in Q1 2015 was listed as $1.572 million, but the fine print indicated that this figure excluded the amortization of intangible assets, stock-based compensation, the gain or loss on derivative financial liability, interest expense, and income tax expense. With the inclusion of these expenses, Q1 would present quite differently. Is this an ethical presentation, and should I be concerned with holding this stock? How does the balance sheet look? Because of my small position, I had planned on holding for a couple of years and riding out the volatility, but of course it's a shame to lose the gain if they are not presenting the true picture, and the stock is weaker than it appears. Your opinion please. Thank-you.
Read Answer Asked by Kim on March 30, 2015
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