Medica Share Discussion Threads

[divinessence] 22/8/2017 09:19

Iomax well done for correcting the numbers and a few doomseters here. I always beleive if you dont like the company then sell and seek fortune elsewhere. Someone posted a link on Hargreaves Landsdown, thanks. I looked at their portfolio. They are a shrewed cookie and they had 2% of their portfolio invested in MGP earier this year. Speaks volumes, much more than some here. Like I said SCW devoted a full page to MGP, read the article. It's a quality growth business with minumm outlay. As a matter of fact its a defensive stock against future turbelenace in the stock market.

[dan_the_epic] 22/8/2017 08:28

Not on the computer at the moment. Anyone know what a cash/debt adjusted PE here is for 2018?

Back of the envelope off the top of my head...

11.3m PBT so like 9m PAT Vs an EV of about 250m? I.e. 27-28x 2018 earnings atm?

[dan_the_epic] 22/8/2017 08:25

Valid point on the PBT - My mistake

[lomax99] 22/8/2017 08:07

Dan - that forecast of £6.3m you quote was for last year? The forecast SCSW quote for this year is £9.3m, which brings your PE multiple down somewhat, their forecast of £11.7m for 2018 brings it down even further.

They have a market leading proposition in a resource constrained market where the outsourced element is <4% (!), with healthy gross margins (c.50%) and an IT infrastructure capable of handling significantly higher volumes for a relatively modest incremental investment. Also, as bigshortfella highlights above, they are targeting new sectors.

[thebigshortfella] 22/8/2017 00:24

In their May write up, SCSW mentioned that MGP are set to launch new services such as mammography, colonography and PET scans.

I just checked the Medica website and noticed this:

hxxp://www.medicagroup.co.uk/colonography/

I don’t recall this previously so it appears that they are now offering bowel cancer scans to their clients. Am I right in assuming that any revenues generated by this service over the rest of the year will not have been be factored in to the results? Is this why the funds have been building significant positions in MGP?

To get some insight into the number of scans that are carried out in the UK: "There were around 41,300 new cases of bowel cancer in the UK in 2014, that’s 110 cases diagnosed every day." This obviously does not fully quantify the number of scans that are carried out (as not everyone is diagnosed) and clearly MGP will only be carrying out a small percentage of these.

At what point will they be offering mammography and PET scans?

SCSW added MGP in April and wrote in May "In constructing this portfolio, I have always looked for stocks that I think have scope to grind higher whatever the weather.” Whilst MGP has the risk of only having one customer – the NHS – they are unlikely to be negatively impacted by any weakening in the economy as these services are required no matter what.

I am related to two very experienced NHS Doctors and have discussed MGP’s solution with them separately and they are absolutely convinced that the NHS is not going to be in a position (regardless of what the Labour party are intimating) to bring the services that MGP provide in-house as their is a severe shortage of radiologists, the training takes years and the NHS don't have the expertise to create a similar service across CCG's.

[dan_the_epic] 21/8/2017 20:47

Not many are on multiples bigger than this... and arguably those offer better consumer end-markets than the NHS and hospitals with this.

[divinessence] 21/8/2017 20:44

Well institutes have built position in MGP, SCW had a full page on it in May 2017, was full of praises for the business. Its the growth prospect and much more to come is keeping it going. Solid business as many other stocks have far bigger mulitples of earnings than this one. Quality!

[dan_the_epic] 21/8/2017 20:16

Broadly agree on that as this IPO'd at 135p. There is a lot of hot air in this IMO. No way did CBPE leave this much easy money on the table if they thought they could rationally get it.

Investors are certainly paying up well in advance of the promised cash flows. PAT of 3.5m last year. According to SCSW, forecasts look like 6.3m for this year on the Pre-tax level so this is on at least 40x this years earnings.

Priced to perfection captures it well. I'd buy at 150p.

[solooiler] 21/8/2017 19:49

Yes and that's all well and good, but this is trading on some ridiculous multiple for FY18 and FY19. This sort of stock is priced to both execution-perfection and market-perfection at the moment.

If they miss forecasts, this falls by at least a third. If the market sells off, this would likely be one of the most impacted.

Really don't see the appeal. Feels inflated on the back of a couple of tips. Is it an interesting business? Yes. Should investors pay an obscene multiple for it? No.

[mysteronz] 21/8/2017 16:55

I would imagine its just drifting on no news, the trading update was abit lacking in details. Whenever i revisit the investment decision i re-read this:



hxxp://www.hl.co.uk/funds/hl-funds/hl-select/managers-blog/a-new-holding-into-the-future-of-radiology

[divinessence] 21/8/2017 13:02

ANybody can shed a light on what's been going on here for days? share price hasn't moved much but big trades happening?

[solooiler] 16/8/2017 22:18

As much as you can like the story, the valuation here is complete crackers. Suspect I'd have to wait a couple of years just for the valuation to settle down, even with earnings ahead of forecasts...

What am I missing? Story aside

[solomon] 16/8/2017 19:39

All the stars seem aligned for this to rise. I would have expected it to keep rising from the 230 mark, but it didn't.
The trading reports seem difficult to understand (for me). Today it looked like 600k shares were a rollover and most of the others were AT trades which I always regard as trades to keep the valves warm on the High Frequency Trading computers.
I'm not in but I would be if there were a convincing break above 230.

[divinessence] 16/8/2017 15:32

Persistent buying for days

[thebigshortfella] 11/8/2017 17:07

Thanks Glaws2! That's what I thought but I couldn't figure out the last one. Doh!

[glaws2] 11/8/2017 16:22

Increasing

[thebigshortfella] 11/8/2017 16:14

Please excuse my ignorance but is this Old Mutual increasing or decreasing their stake:

[thebigshortfella] 08/8/2017 15:41

Thanks Scrutable! I agree.

The share price movement is like Groundhog Day.

Up initially - only to fall back in the afternoon. It seems to have support but would like to see it above £2.20

[steve3sandal] 02/8/2017 16:10

Scriptable....if you google Small-cap stocks at risk from NHS belt tightening
It will open a list. You can click on the FT article for free.
Not news to us and as stated above misunderstands Medica

[scrutable] 02/8/2017 11:54

bigshort

regretably, I was travelling and cluttered, so it was binned, and I don't subscribe to the electronic version. It was short, approving and very positive but only summarised an opinion anyone would have from reading the few results and AGM reports from 2017.

FWIW I think that this 2017 first listing is a great, quiet, steady, fairly predictable medium growth, slow burner and dividend payer for the risk averse, currently at the bottom of its trading range and therefore a good buy this week, four weeks ahead of its interims.

The company provides an innovative outsource for pressurised NHS trusts, and the public have yet to catch on - so there is still a 25% upside towards the reporting date, and it will still retain the potential for a slight re-rating..

[valustar1] 30/7/2017 05:32

Thought the last para in the article showed a misunderstanding of the industry. Basically it was a comment Medica vulnerable to changes in the gov approach to health service. Trusts don't have the staff to take back in house.

[thebigshortfella] 29/7/2017 23:52

SCRUTABLE - Do you mind posting what they wrote? Thanks!

[scrutable] 29/7/2017 23:37

Approving piece on the company in the FT today should do good on Monday.

[malcolmmm] 26/7/2017 09:59

Buyers coming back in so bought back in myself

[lomax99] 25/7/2017 20:08

They are still carrying pre-float debt, so I don't mind a lower yield whilst they focus on the growth phase ahead of them.