Source: Streetwise Reports 09/30/2020
The investment thesis for CloudMD Software & Services is presented in a Mackie Research Capital Corp. report.
In a Sept. 28 research note, analyst Yue Ma reported that Mackie Research Capital Corp. is initiating coverage on CloudMD Software & Services Inc. (DOC:TSX.V; DOCRF:OTCQB; 6PH:FSE) with a Buy rating and a CA$2.80 per share target price. In comparison, the stock is currently trading at about CA$2.08 per share.
CloudMD is a “growth at a reasonable price play” with “ample room for valuation upside,” Ma highlighted. He gave the reasons why the healthcare firm makes a compelling investment.
For one, it is in a space that is quickly growing: telemedicine. CloudMD provides virtual medical care along with in-person care from its five clinics in British Columbia and owns an array of healthcare technology products it offers on a software-as-a-service (SAAS) basis. With the latter, it serves 376 clinics, 3,000 doctors and more than 3 million patients throughout Canada. Furthermore, CloudMD continually works to garner new users of its products.
Get our Weekly Commitment of Traders Reports: - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.
Get Our Free Metatrader 4 Indicators - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter
“The transition to telemedicine, as well as, the growing SAAS-based business, is expected to turn CloudMD cash flow positive, and its margins should improve,” noted Ma.
Two, the Vancouver-headquartered company is a heavy acquirer, with three such transactions in progress and a goal of purchasing at least one cash flow positive clinic every quarter on average going forward. This should generate “accretive $2–3 million quarterly revenues,” Ma indicated.
Three, CloudMD is expanding into the U.S., which has an “enormous primary care market,” wrote Ma. For starters, it is about to close on the acquisition of a chronic care clinic in Mississippi, which it plans to then expand into a network that serves the Southeast region.
Four, the company’s entire management team brings years of experience to CloudMD. For instance, CEO Dr. Ezra Assam founded HealthVue in 2005 and expanded it to encompass four clinics before CloudMD acquired it for $4 million in 2018. Chairman Mark Kohler, under his leadership as chairman of QHR, the electronic medical records vendor became the third largest in Canada and was acquired for $170 million by Loblaw in 2016.
Potential catalysts expected in 2020 include new acquisitions, closings of already made deals and, in November, Q3 earnings, the analyst noted.
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with CloudMD Software & Services Inc. Please click here for more information.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of CloudMD Software & Services Inc., a company mentioned in this article.
6) This article does not constitute medical advice. Officers, employees and contributors to Streetwise Reports are not licensed medical professionals. Readers should always contact their healthcare professionals for medical advice.
Disclosures from Mackie Research, CloudMD Software and Services Inc., Initiating Coverage, September 28, 2020
RELEVANT DISCLOSURES APPLICABLE TO COMPANIES UNDER COVERAGE
1. This Issuer has generated investment banking revenue for MRCC.
2. Relevant disclosures required under Rule 3400 applicable to companies under coverage discussed in this research report are available on our web site at www.mackieresearch.com.
Each analyst of Mackie Research Capital Corporation whose name appears in this report hereby certifies that (i) the recommendations and opinions expressed in this research report accurately reflect the analyst’s personal views and (ii) no part of the research analyst’s compensation was or will be directly or indirectly related to the specific conclusions or recommendations expressed in this research report.