Wilson Asset Management has bought 10%

https://stockhead.com.au/news/trading-places-wilson-asset-management-just-snapped-up-nearly-10pc-of-laser-clinic-operator-silk-laser/

I bought a small starter position today. Somethings I like:

• Decent margins and a good amount of revenue per location.
• Growing industry
• Repeat customers that you can cross-sell other new treatments
• Lots of room to grow with more clinic locations

My 2cents on SLA.

• Capex required to open a typical new clinic estimate at $0.5-0.8m, and within one year becomes cash break even within 1 year of operation. The metrics are quite compelling:
  • Year 1 of operation has a ROC of 9%
  • Year 2 of operation has a ROC of 32%
  • Clinics more than 3 years of operation has a ROC of 55%
• I don't know how SLA is better than the laser clinic/skincare clinic down the road.
• Skincare products is also a very crowded place, not sure how SLA products have any brand power as such.
• Extended Covid-19 lockdowns would mean lost trading revenue.
• Hasn't been listed long so can't really understand track record of management.
• P/E at around 28, no dividend.
• Strong balance sheet, but it looks like a cap raising was done in FY20.
• Insider Ownership - Director selling activity recently this month.

It would be a wait and see for me.