Cvs Share Discussion Threads

[lomax99] 16/3/2024 06:37

CVS discount is too high, says LiberumThe discount at which veterinary group CVS (CVSG) trades is 'too high', given the competition watchdog's review into vet practices is likely to prove there is no case to answer, says Liberum.Analyst Seb Jantet retained his 'buy' recommendation and target price of £22 on the stock, which gained 1.4% to £14.92 at the end of last week after its interim results. The shares have shed 21% over the year following the Competitions & Markets Authority (CMA) decision to investigate whether vets were providing consumers with value for money.Jantet said there was not a lot of new information in the result but added that 'we are still waiting for the most important piece of information, being the CMA's initial decision which is still expected in early 2024'.'While the shares have recovered a little over the last few months, they are still trading on undemanding multiples both in absolute terms and in relation to historic ratings, on a current year 2024 embedded value to pre-tax profit multiple of 9.9 times,' he said.'While we accept that the CMA uncertainty warrants a discount over the historic rating of around 15 times, the discount looks too high to us, especially given our view that there is a good chance the CMA will conclude there isn't a case to answer when it next updates.'

[wad collector] 15/3/2024 18:40

Well that took another hammering today. Below £10 for first time in 4 yrs. Timed my buy badly a couple of weeks ago. There seems a lot of pessimism priced in now. Suspect a gradual recovery will happen but not until more CMA clarity.

[tsmith2] 15/3/2024 09:59

overhang cleared? 50k odd sell reported

[bulltradept] 13/3/2024 17:58

Mmmm got to stay above a tenner...

[travis2] 13/3/2024 12:14

To add to that CVS also own one of the biggest online pet pharmacies (Animed) so they have that base covered too.

[babbler] 13/3/2024 11:51

Looking good.

[babbler] 13/3/2024 06:50

It cost me just my excess when my pets died not long ago. The insurance paid the bills. Only thing they don't really pay for is standard prescriptions. If you can't handle the bills that's what insurance is for in this case.

[babbler] 13/3/2024 06:48

Totally agree. In my area there are quite a few vets most or all have a waiting list of at least a month and quite a few are independent. Competition is high and there aren't enough vets. Supply and demand means prices are high. That's life. If there was no demand prices would fall.

[undervaluedassets] 13/3/2024 05:29

Well we now have a 2017 share price

And in 2017 the company had EPS of 18p, profits of 14 million and a 271 million turnover.

Is that what we should expect? instead of the pencilled 80-90p in earnings on 50-90 million in profit on a turnover of 670 million?

I do not see that being the case...

Ergo .. cheap

The market panicked today. In the past, I have done well out of buying into panics.

[wad collector] 12/3/2024 21:18

The prescription issue is a bit of a red herring. If more owners take the prescriptions away and get them cheaper from suppliers then the practices will have to recoup that loss by increasing other fees . Unless the practices make reasonable profit then the vets will walk away . Exactly how the charging structure is formulated does not get round that problem. It is not clear from the CMA report how widespread they think the monopolistic problem is. Doubtless there will be some posturing from the CMA but unless most of the CVS practices are in isolated areas without competition, then they will be in a similar boat to all the practices.

[1c3479z] 12/3/2024 19:28

Point taken, looks as though the CMA may enforce some action on prescriptions, possibly also lab and radiology investigations and cremations. Some groups may have to divest some surgeries in certain areas.

[aberloon2] 12/3/2024 19:02

My dog is on heart medication, his £400 annual insurance (which is meant to help cover the cost of professional time, investigations,surgery, anaesthesia, nursing and ancillary staff, CPD, drugs,and premises) doesn't cover any heart issues now, so every month we have to pay £66 for 30 pills from the surgery. Until today. As a result of the hoohaa here i checked online for his drugs, £15 for the same. My heart bleeds for them...

[1c3479z] 12/3/2024 18:39

general public spoiled to an extent by the NHS being 'free' and don't appreciate the cost of professional time, investigations,surgery, anaesthesia, nursing and ancillary staff, CPD, drugs, premises: they expect a trip to the vets to be similarly cheap but are unaware of the costs of running a business like this.

[essentialinvestor] 12/3/2024 16:21

Appreciated Dave.

[disc0dave46] 12/3/2024 16:14

Hi EII'd pencilled in 95p to 100p eps here and it's historically been highly rated (average PE circa 23x although read somewhere the median is a lot higher?). The CMA issue could change that growth rating, they've achieved 33% CAGR in eps over the last 6 years or so and IMO such a high rating was justified, if their growth is impacted then pick a number!. Would sooner keep this in my watch list now and see how it pans out. It's a binary bet at the moment.

[disc0dave46] 12/3/2024 16:09

BabblerIf you read the PETS response it comes across a lot more positively IMO, that they have nothing to be concerned with and it won't impact on their growth. Hence I guess the reason for only a 3% drop in share price I'd still contend that admitting they have plans to address issues says a lot, and not reaffirming that their growth won't be impacted suggests it possibly could be. Yes glass half empty opinions but the market seems to take the same view.

[undervaluedassets] 12/3/2024 16:02

been buying all day.

The business still stands

pet owners don't stop going cos of the CMA

Will be viewed storm in a teacup in few years time. And once in lifetime buy opp.

16 million pet owners still need their pets looking after.

[tsmith2] 12/3/2024 15:41

dipped toes at £11

[essentialinvestor] 12/3/2024 14:49

Dave, what's your call here..too much risk ? Thanks.

[disc0dave46] 12/3/2024 14:12

Saying they have plans in place already could be interpreted negatively, that they know there are issues that the CMA will clamp down on.

[essentialinvestor] 12/3/2024 13:20

I would call a (temporary) halt to all UK acquisition activity and focus fully on balance sheet strength, given arguably heightened uncertainty.

[babbler] 12/3/2024 13:16

They keep mentioning prescriptions so that's most likely.

[essentialinvestor] 12/3/2024 13:15

Highly aquisitive business and and acquisition case will be predicated on an expected margin for a newly acquired business/es..

The market may be questioning margins going forward
and where this leaves profitability..?.

[1c3479z] 12/3/2024 13:11

CMA could bear down on cremation fees, drug pricing and lab investigations. These could be the most profitable part of the vet practice? don't know as not in the profession. Can't do anything about vet's time or the range of investigations ordered though could put a price cap on common radiology and lab investigations I guess.