Author Topic: VMD.TO - Viemed Healthcare Inc.  (Read 3298 times)

maybe4less

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Re: VMD.TO Viemed Healthcare Inc.
« Reply #10 on: September 21, 2018, 09:23:08 AM »
If I were them, I would pro-actively enter negotiations with insurers and government agencies in order to set up a bundled payment system based on long term objectives and outcomes. Really complex but that's where the money is and all the patient is asking is to breathe better. Deep pockets required but could start with pilot projects.

As you probably know, they are indeed actively doing this. They've yet to land a big deal so far though, but they are also unaware of anyone else in the industry having done so. Viemed is hitting the VA pretty hard; hopefully that goes somewhere soon.


Cigarbutt

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Re: VMD.TO Viemed Healthcare Inc.
« Reply #11 on: September 21, 2018, 06:26:52 PM »
As you probably know, they are indeed actively doing this. They've yet to land a big deal so far though, but they are also unaware of anyone else in the industry having done so. Viemed is hitting the VA pretty hard; hopefully that goes somewhere soon.
Your post seems to imply a privileged access to insider info.
This is not the case. I follow the area to harvest and first learned and read about this specific company about 10 days ago.

Bundled payments are promising. When it was introduced on the procedural side, there was a learning curve but the protocols are now IMO well established and being refined. For the chronic conditions side, success is not guaranteed, there are more variables, the learning curve will be longer but that is the area where most of the savings/profits lie. For the generic bundled payments, there are several ongoing and parallel endeavors (public and private) and some like Prometheus Payment include patients with chronic respiratory failure. For chronic lung ailments under bundled payments, there are established protocols in the Netherlands and some work has been started in Ontario (Canada).

There was a CMS-funded study published in 2016 that may signal that bundled payments won't work in chronic lung disease but that may just mean that we are early in the game.
https://www.atsjournals.org/doi/pdf/10.1513/AnnalsATS.201610-775BC

I assume that the triple venture spearheaded by Todd Combs may look in that direction and the dominoes may start to fall.

maybe4less

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Re: VMD.TO Viemed Healthcare Inc.
« Reply #12 on: September 22, 2018, 08:52:25 AM »
As you probably know, they are indeed actively doing this. They've yet to land a big deal so far though, but they are also unaware of anyone else in the industry having done so. Viemed is hitting the VA pretty hard; hopefully that goes somewhere soon.
Your post seems to imply a privileged access to insider info.

Not at all. They've mentioned this many times on their earnings/investor and called out the VA effort specifically on the last earnings call. You can also call up the COO and he'll tell you the same story.

Cigarbutt

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Re: VMD.TO Viemed Healthcare Inc.
« Reply #13 on: September 22, 2018, 09:56:56 AM »
They've mentioned this many times on their earnings/investor and called out the VA effort specifically on the last earnings call. You can also call up the COO and he'll tell you the same story.

Thanks.
Slowly digging deeper here. In these potential "the best is yet to come" ideas, I usually end the analysis with the more direct stuff (calls, videos etc) because doing so early in the appraisal may frame the thought process as many of these owner-operators can be unusually good at sales pitches. ;)

maybe4less

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Re: VMD.TO Viemed Healthcare Inc.
« Reply #14 on: September 22, 2018, 12:05:13 PM »
They've mentioned this many times on their earnings/investor and called out the VA effort specifically on the last earnings call. You can also call up the COO and he'll tell you the same story.

Thanks.
Slowly digging deeper here. In these potential "the best is yet to come" ideas, I usually end the analysis with the more direct stuff (calls, videos etc) because doing so early in the appraisal may frame the thought process as many of these owner-operators can be unusually good at sales pitches. ;)

Sorry, you seem very knowledgeable on the company, so I assumed you knew about those efforts. :)

These guys certainly are promotional and will freely admit it that they want the stock price to reflect the success of the underlying business. That being said, I believe there is a lot to like about the business.

My problem is mostly one of valuation. I think you have to model in some reimbursement cuts over time. When you do that, the stock seems roughly fair-valued to me (i.e., you get high single-digit returns from here), to a greater or less degree depending on what growth rates you assume.

I've sold into this run-up as it approached my estimate of fair value, but I think momentum may continue to drive the price up for a while. Many investors may be looking at the 40% growth rates and not thinking too hard about the future and there is still an element of "market discovery" going on, since they have only been independent since December. These types of companies seem to trade at much higher multiples than I would want to pay, so for now I'm letting it ride.

writser

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Re: VMD.TO Viemed Healthcare Inc.
« Reply #15 on: November 19, 2018, 10:56:42 AM »
Interesting price action today ...
When you are dead, you do not know you are dead. It's only painful and difficult for others. The same applies when you are stupid.

Cigarbutt

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Re: VMD.TO Viemed Healthcare Inc.
« Reply #16 on: November 19, 2018, 11:30:03 AM »
Interesting price action today ...
I'v been scratching my head too as the regulatory "news" did not seem that unusual; it seemed like negotiation-as-usual type of tactics from the CMS? It just goes to show how 1-these firms remain at the mercy of the Big Brother regulator and 2-how skittish the crowd seems to be.

For 1-, this is a humbling experience: in the last 24 hours, I blasted an idea submitted by Gregmal on regulatory and sustainability concerns and that stock is up about35% as this is written. And on this thread, I tried to explain how VMD has some regulatory moat and with a blip on the news screen, the stock goes down by about the same amount.

For 2-, if I'd be 10% as intelligent as Mr. Druckenmiller, I'd say this kind of price action is telling us something.

maybe4less

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Re: VMD.TO Viemed Healthcare Inc.
« Reply #17 on: November 19, 2018, 11:42:58 AM »
Interesting price action today ...
I'v been scratching my head too as the regulatory "news" did not seem that unusual; it seemed like negotiation-as-usual type of tactics from the CMS? It just goes to show how 1-these firms remain at the mercy of the Big Brother regulator and 2-how skittish the crowd seems to be.

For 1-, this is a humbling experience: in the last 24 hours, I blasted an idea submitted by Gregmal on regulatory and sustainability concerns and that stock is up about35% as this is written. And on this thread, I tried to explain how VMD has some regulatory moat and with a blip on the news screen, the stock goes down by about the same amount.

For 2-, if I'd be 10% as intelligent as Mr. Druckenmiller, I'd say this kind of price action is telling us something.

Yeah, the price move is interesting and probably reflects more than anything that the stock had gotten ahead way of itself. If I model in a 10% rate cut in a few years, the stock currently just seems slightly undervalued to fair valued.

Seems pretty clear a lot of momo investors were in this and are getting out. If you weren't prepared for this kind of regulatory news and pricing the company appropriately, than you weren't paying attention.

That being said, CMS seems to have realized that its initial competitive bid process forced the "winners" to cut so hard into the bone that patient outcomes were suffering. Reforms now see to be in the offing. Being a part of the competitive bid regime may not be such a negative in the future as it has been in the past.

writser

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Re: VMD.TO - Viemed Healthcare Inc.
« Reply #18 on: November 20, 2018, 12:05:24 PM »
Even more crazy today ..
When you are dead, you do not know you are dead. It's only painful and difficult for others. The same applies when you are stupid.

writser

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Re: VMD.TO - Viemed Healthcare Inc.
« Reply #19 on: November 23, 2018, 04:22:34 AM »
Confession: after the huge drop the past few days I decided to buy some shares without having a firm grasp of fair value (never looked at in sufficient detail). The company looked cheapish at first glance, the price action looked ridiculous and the rumors about competitive bidding looked overhyped with changes coming into effect in 2021 at the earliest.

The past two days I have been trying to tag a price onto Viemed and I have come to the conclusion that this company is too hard for me to value. Revenue is growing at 40% annually, EBITDA is growing 40% annually, obviously if you project this growth for a few years the sky is the limit. However, how sustainable is this growth? How sustainable are profits given that you are basically exploiting the US government? Why is revenue outgrowing the number of patients by 12% p.a.? Is that sustainable? Why are earnings not hitting the bottom line? Also, insiders receive a huge paycheck and the company's past is a bit shady.

All in all, here I was with a position in a stock I didn't know how to value. After two days of thinking I decided to sell my shares in the run-up for a small gain. Got lucky. Too hard for me.

If anybody smarter than me has some thoughts on how to value this company they'd be appreciated. What approach do you use? What growth do you model? The problem is not as much choosing a model but rather choosing inputs for the model. With what conservative assumptions (if any) do you conclude there is signficant upside?
« Last Edit: November 23, 2018, 04:26:33 AM by writser »
When you are dead, you do not know you are dead. It's only painful and difficult for others. The same applies when you are stupid.