Consensus community valuation
$25.69
Average Intrinsic Value
8.2%
Undervalued by
Active Member Straws
#HY2020 Results
Added 6 months ago

Yet another cracker.

Revenue up 15.7% despite a large one-off capital sale in the prior half. Margins improved, with net profit up 32% (go operating leverage!)

Operating cash flow jumped strongly, as did the cash balance -- which sits at almost $39m. The company still has no debt.

Implementations are being completed ahead of schedule and without any major issues, and there is plenty of capacity to onboard new customers. 

Sales pipeline is as strong as ever, and the company is getting an increased network and 'social proof' effect due to its high profile client list.

Some super exciting stuff happening in AI, which i've always thought has huge potential. PME is one of the rare ASX companies that can legitimately claim to have direct and high-potential exposure to this theme.

I'd encourage investors to read the Open Briefing interview -- although it's hardly a tough interview, there are some good insights.

I think PME is one of the best stocks on the ASX. The only challenge is one of price -- there's a heck of a lot of optimism priced in. On a trailing 12 months bases, shares are presently on a Price to sales of 55x!! (based on share price of $28.97 at time of writing). The ttm PE is ~140

I previously sold down some of my position mid last year when the price was getting a bit silly, but retain a modest holding. Not looking to buy more anytime soon, but happy to leave existing shares in the bottom drawer -- the sheer degree of quality makes me far more relaxed on valuation than i would normally be.

Results announcement here

 

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#Contract win
Added 2 months ago

ProMedicus has announced a material win, signing a $22m 5yr contract with Northwestern Memorial Healthcare for its Visage 7 product.

This will be based on the usual transaction based licensing model, which provides further upside if usage exceeds a set minimum.

This is the biggest individual contract signed since the Partners Health deal in late 2018. 

You can read the ASX announcement for the new contract win here, and an interview with CEO Sam Hupert here.

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#Management
Added 5 months ago

Some big insider buys on market announced today (Anthony 41,00 shares and Sam 30,00 all above market price) have finally encouraged me to take a position, knowing that 1. Yes general sentiment in the market could likely bring this down further and 2. The current valuation (even after this huge sell off) is still on the high side. In the short term, new contracts might slow down and we all wait to hear of any news regarding the impact of the pandemic.

 

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#ASX Announcements
Added 6 months ago

13 February 2020

HIGHLIGHTS

  • Revenue $29.3m–up 15.7%
  • Net profit after tax $12.1m–up 32.7%
  • Underlying profit before tax $14.8m–up 45.3%
  • Cash reserves $38.8m–up 20.2%
  • Fully franked interim dividend 6c per share up 71.4%
  • 2key contracts announced during the period
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