Spire Healthcare Share Discussion Threads

[cantrememberthis2] 30/9/2018 09:46

fahads listen to the Q&A, the Berenberg Analyst had no rapport with Justin Ash and was short changed in the response to his question. This grumpiness and ego hit may have led to the Analyst issuing his negative stance. Hence these pseudo experts are vultures or bulls... The Q&A part made be bullish in many ways, debt covenants, BMI struggling and opportunities to regain market share all imo

[fahads] 30/9/2018 09:18

In my opinion, given current (low) utilisation levels, Spire's earnings are significantly below what they potentially could be. Especially keeping in mind that a lot of the costs are fixed, thus any increase in volumes should be significantly positive for margins (the same issue hurts you on the downside when volumes decline as we are seeing right now). Thus in terms of 'true value' - it remains highly subjective and the earnings growth profile will likely determine that.

I have been trying to focus more on the worst case scenario and the downside risk to determine if I should continue to increase my holdings and at what level. Based on my skimming of the annual report...it looks like the liquidation value of the business is around GBP1.2-1.25 (stand to be corrected) - in my mind, that is the worst case scenario. Would anyone concur?

On the positive side, I feel earnings could easily double even on the existing asset base (if volumes start growing), in which case instead of the 20x P/E you see today, that PE could drop to 10x, implying an easy two bagger.

Would like to hear thoughts on this.

[bountyhunter] 30/9/2018 00:37

It's a US device and so far as I can tell there is no connection.

[excellance] 29/9/2018 22:35

what is the "spire health tag" being launched by apple, is it a new venture for spire health?

[bountyhunter] 29/9/2018 20:06

Why mention it then as not really of any relevance when discussing SPI.

[essentialinvestor] 29/9/2018 20:03

Made no comparison to Capita, mentioned someone had referenced CPI here.
Justice, no current position, and don't go short individual stocks.
Posted it now looks a sitting duck for a bid, but there is no guarantee.
I was cautious last year as thought margins and profitability would
come under pressure.

[justiceforthemany] 29/9/2018 18:28

In here for the long haul. Looking for at least 50% gain from here. Made 36% last year on the last bid. Hospital Corporation of America have been sniffing around Spire for years and were even willing to pay 468p for Mediclinic's stake last year.

[bountyhunter] 29/9/2018 17:23

Capita lol! Talk about comparing apples with pairs!! It will be Tesla next!
jfm - the silence in response to your quite reasonable question is palpable!

[justiceforthemany] 29/9/2018 16:43

So you have no position here then EI?

[jonwig] 29/9/2018 16:25

EI - you're right that the share price history ought to be irrelevant, and I suspect that MDC is in no position to bid. But 'recruitment and retention in the NHS' can be two-sided. Private providers aren't constrained in the same way as the NHS where 'agency staff' play a part in raising wage costs anyway. [I assume I'm right about wages in the private sector ... aren't I?]

Anyway, there might be an investment case at this price, or at some price lower than this. I need to get more up to speed. I wonder how much politics there is here, which could scupper any rational analysis.

Incidentally, I have personal family experience of a local clinic run by Ramsay Health. It's marvellously efficient and happy, and accepts lots of NHS referrals but my strong impression is that staff aren't stretched and there's a significant cushion.

[essentialinvestor] 29/9/2018 15:23

First observation is this is not just Spire.
If you look at MDC, it's share price has also been hammered.
Outside of a bid, which may happen, the bullish case
rests on reversing the profitability decline.
I no longer work in the industry, however it's widely reported
that recruitment and retaining staff is a major issue atm.
There are thought to be over 100,000 job vacancies in the NHS.
Margins are a key factor in profitabilility, and scarcity
of skilled workers is unhelpful.

In terms of attempting to value a particular company, I don't look
at previous share price levels, it can often be misleading, or just indicate exuberance
at a given point in time.
Someone here mentioned Capita, Capita is a shadow of the company it once
was. Referencing past share prices in cases like CPI is meaningless as a result.

[justiceforthemany] 29/9/2018 15:09

Also given your previous warning where is the bottom here in your eyes and what do you think is the true value of Spire Healthcare?

[justiceforthemany] 29/9/2018 14:20

We all know about the lower EPS EI but this could change rapidly due to the largest NHS waiting lists ever recorded. Net debt is down slightly from year end EI and the balance sheet/net assets has also barely changed. What is your position here and are you saying a drop from 400p to 140p for such a defensive sector is justified?

[essentialinvestor] 29/9/2018 13:04

It's trading a lot lower as profitability is falling and net debt rising.
People appear to focus on the share price level, while ignoring changing fundamentals.

I warned here a couple of times previously, however would now agree they
are a sitting duck, if someone wants to bid. No guarantee of that.

[bountyhunter] 29/9/2018 12:41

And if you had told MDC they wouldn't have believed their luck!

[justiceforthemany] 29/9/2018 12:28

Put it this way if I had told you 2 years ago that the largest British private healthcare company by revenue would be trading at a third of the share price now you would not have believed me or thought that was possible.

[justiceforthemany] 29/9/2018 12:26

I note none of the major directors have bought any shares since early August. Could be in a closed period. CEO and Chairman have decent sized holdings even at this share price.

[bountyhunter] 29/9/2018 10:55

Mediclinic could always offer a cash/share mix. Their share price would then be expected to rise based on the synergies alone.

[jonwig] 29/9/2018 10:38

@ justice - that's an interesting link, thanks.

Politically, it's a bit fraught of course. The Tories would probably go along with raised prices, and Labour would scream 'evil', but go along for a while as they realise the NHS hasn't the capacity.

My personal feeling is that this share price is going down because short-term sentiment is awful, and I'm sceptical about a bid. (Has Mediclinic got the firepower?) Can any chartists read a bottom in sight?

[cantrememberthis2] 29/9/2018 10:17

Stock screeners and traders will see this on technically oversold territory.
I for one will be adding sub 140p...
The MMs mopped up a lot of sell side trades (buys off stop losses etc).
Let's see what the Sunday papers say.
Mediclinic are hurting.

[cantrememberthis2] 28/9/2018 22:00

Listened to webcast: spot on agreed. Analysts thick at times. They already have 3 months visibility to end of year.