Sam Hupert and Anthony Hall both buying about $500k on-market each.

Not a needle mover relative to their overall position and net worth, but a soft signal of value.

PME off about 11% on the back of a pretty strong result, market expecting more. Might have a nibble as I don't own with a bit bit of profit from ALU (owned since January 2015)

This is uber cool, Pro Medicus + Apple Vision Pro. I can imagine the Pro Medicus stand at the next trade show with Marques Brownlee giving a demo in person :-)

I would like my doctor to take a virtual tour of my body before he cut me open! I'm not sure it means anything for business in the short term but the market gave it a nice bounce today.

https://visageimaging.com/platform/visage-on-apple/

Visage Launches Visage Ease VP™ for Apple Vision Pro

Highlights

• Visage has launched the groundbreaking Visage Ease VP for Apple Vision Pro
• Visage Ease VP supports immersive, spatial experiences for diagnostic imaging and multimedia
• Visage’s cinematic rendering engine is natively available in Visage Ease VP providing stunning volume-rendered images in immersive space
• Visage Ease VP provides an end-user imaging experience that’s unlike any other application

Leading health imaging company Pro Medicus Limited [ASX: PME] today announced its wholly-owned U.S. subsidiary, Visage Imaging, Inc., has announced the launch of the groundbreaking Visage Ease VP for Apple Vision Pro, Apple’s highly anticipated spatial computing platform.

Designed to take advantage of the unique capabilities of Apple Vision Pro, Visage Ease VP supports immersive, spatial experiences for diagnostic imaging and multimedia. Visage Ease VP includes all the proven functionality of Visage Ease™, plus the exciting addition of Visage’s powerful cinematic rendering engine for stunning volume-rendered images in immersive space. Anywhere, on-the-go access with Visage Ease VP has additional flexibility with virtual screens at more than 4K resolution for each eye, independence from environmental lighting restrictions, and the ability to interact with imaging seamlessly in your physical space. Visage Ease VP uses the natural and intuitive input of eyes, hands, and voice navigation to provide an end-user imaging experience that’s unlike any other application.

UC San Diego Health, a Tier 1 academic medical center and Visage customer, is the first health system to pilot the technology.

“The visualization of three-dimensional medical imaging in immersive space creates exciting opportunities to improve patient care,” said Dr. Paul Murphy, associate clinical professor at UC San Diego School of Medicine and radiologist at UC San Diego Health. “Technology that allows for sophisticated eye motion and gesture controls for reviewing 2D and 3D medical imaging could potentially help in efficient tumor board reviews and create collaborative spaces in healthcare.”

·       November 2023 Oregon Health & Science University A$20m 8 year contract - OHSU includes OHSU Hospital and OHSU Doernbecher Children’s Hospital, comprising a total of 576 licensed beds. OHSU also includes a system of clinics across Oregon and southwest Washington state, employing nearly 20,000 staff. Based on a transactional licensing model, the contract will see the company’s cloud-engineered Visage 7, including Visage 7 Open Archive and Visage 7 Workflow modules, implemented throughout OHSU providing a unified diagnostic imaging platform. Visage 7 will also provide enterprise distribution of images integrated to OHSU’s electronic health record (EHR). Transaction-based model with potential upside. https://announcements.asx.com.au/asxpdf/20231113/pdf/05x802m6cs2mh7.pdf

·       October 2023 South Shore Health A$16m 8 year contract - the largest independent health system in Southeastern Massachusetts. South Shore Health includes the 393-bed South Shore Hospital (Weymouth, Massachusetts), has more than 5,600 employees, and has renowned clinical affiliations at academic and cancer centers across Massachusetts that also use the Visage 7 Enterprise Imaging Platform (‘Visage 7’). https://announcements.asx.com.au/asxpdf/20231023/pdf/05wc3cr3mykrb9.pdf

·       September 2023 Baylor Scott & White Health A$140m 10 year contract - the largest not-for-profit healthcare system in Texas and one of the largest in the United States. Contract is for “full stack” - Visage 7 Viewer, Visage 7 Open Archive and Visage 7 Workflow. https://announcements.asx.com.au/asxpdf/20230926/pdf/05v8z70389tnpj.pdf

·       July 2023 Memorial Sloan Kettering Cancer Center A$24m 7 year contract - one of the world’s most respected comprehensive cancer centers devoted exclusively to cancer, recognized as one of the top two cancer hospitals in the US for more than 30 years. MSKCC operates a total of 24 inpatient and outpatient locations across the New York City metropolitan region and attracts patients from across the globe seeking premier comprehensive cancer care. Contract is for “full stack” - Visage 7 Viewer, Visage 7 Open Archive and Visage 7 Workflow. https://announcements.asx.com.au/asxpdf/20230727/pdf/05s0ctw055spbk.pdf

·       May 2023 Gundersen Health System A$20m 7 year contract – a not for profit integrated delivery network (IDN), comprising 7 hospitals and 65 clinics across Wisconsin, Minnesota and Iowa. https://announcements.asx.com.au/asxpdf/20230516/pdf/05pqzwn2073wvg.pdf

Please refer to my previous Straw Contract Win Summary for contract history before May 2023

In todays AFR

Pro Medicus duo in $176m selldown; UCP nabs trade

Listed healthcare imaging software business Pro Medicus’ two founders began selling down $176 million worth of stock on-market just before midday yesterday, after a strong run in the company’s share price.

Fund manager sources said Anthony Hall and Sam Hupert had stockbroker Unified Capital Partners seeking buyers for 2 million shares at $88 apiece. That’s the same price as Pro Medicus’ close yesterday.

The trade was worth just under 2 per cent of the company and went to existing long-term shareholders.

Prior to the trade, Hall and Hupert had owned 25 per cent each of Pro Medicus’ total shares on issue. They are trimming their positions after a 62 per cent rally in the share price so far this year.

The duo floated the company in 2000, when it was making just $9 million revenue and had been around for 17 years. They held on to 40 per cent of the business each after the IPO and have been judicious with selling down in the 23 years since.

For the 2023 financial year, Pro Medicus posted $124.9 million revenue (up 33 per cent) and $60.5 million aftertax profit, which was 36.5 per cent higher. It had a $9.2 billion market capitalisation and has benefited from contract wins.

In the 2023 financial year, it won or renewed multiyear contracts with University of Florida and University of Washington; US non-profit healthcare providers Gundersen Health System, Samaritan Health and Luminis Health; and Montage Health Children’s Hospital of Philadelphia and Bay Imaging Consultants.

Hall and Hupert’s leftover shares – about 24 per cent each – are worth $2.2 billion for each co-founder with the way the stock is trading.

Imaging company Pro Medicus leapt 9.3 per cent this morning after winning a $140 million contract with US-based Baylor Scott & White Health.

HIGHLIGHTS

• PME signs AUD $140M, 10-year deal with Baylor Scott & White Health (“BSWH”)

• Visage to replace legacy PACS and vendor neutral archive throughout the BSWH enterprise

• Contract is for “full stack” - Visage 7 Viewer, Visage 7 Open Archive and Visage 7 Workflow

• Visage 7 platform to be implemented in the cloud

• Continues PME’s rapid expansion into North American integrated delivery networks (IDN) and academic medical centers

• Transaction-based model with potential upside

Yet another spectacular set of numbers from one of the best businesses on the ASX.

I know you shouldn't be fussy with price when it comes to great companies, but Pro Medicus is on a PE of 127..

That could represent value, but you'd need to see at least something like 25% average annual compound growth in NPAT for 10 years, and for shares to then trade at a PE of 35 in 2033. If that happened, you get a 10% average annual capital gain.

Over the last 5 years, the CAGR in EPS has been about 35%. So if you extrapolate that forward and apply a terminal PE of 35 (about what CSL trades on), then your average annual capital gain is something like 18%pa over 10 years. On these assumptions, the company would have a NPAT of $1.2b in 10 years -- and that's perhaps not too much of a stretch, especially with expansion into other areas.

So I'm not saying shares are definitely too expensive, just that a lot of optimism is built in..

(An I'm just bitter having sold down so much over the years. Idiot!)

PME gets broker upgrade from Goldman Sachs and now hitting all time highs

Lesson here is to go with the flow of the institutions and ignore those quoting that PER is too much.

Another day, another sizeable multi-year contract.

ASX announcement here: https://announcements.asx.com.au/asxpdf/20230516/pdf/05pqzwn2073wvg.pdf

Essentially, US$20m over 7 years (with usual upside due to transaction volumes)

This is the 4th major contract win in the last 5 months.

I still hold a small number of shares, but as much as I love the company, I still struggle with the price tag -- something like 50x forward sales.

Co-Founders Dr Sam Hupert and Anthony Hall have each sold 1 million PME shares.

Both sold 1,000,000 shares for $62.22 per share ($62.22m)

https://www.asx.com.au/asxpdf/20230316/pdf/45mqw8d71hbdlq.pdf

They remain the two key stake holders in the company with their combined holding post this recent sale in excess of 50%.

One of the best run companies on the ASX. i use visage imaging everyday- its superb. It has helped revolutionise radiology reporting outside of normal business hours whereby imgaes can be taken and sent to someone anywhere in the world for reporting. Its such an effecient system that i often get CT scan images reported more quickly at midnight than at midday.

huge addressable market- most hospitals will use this or a similar system within the next decade. Of course the biggest issue is its just so damn expensive at current share price and is priced for perfection and more.

given the current price im an admirer from afar currently but a good pullback and i will be jumojng aboard. Something in the $30s would be nice. Might be wishful thinking but i need meat on the bones

I have to admire the previous straws about PME being overvalued and trading at high valuations.

People probably buy stocks with no profit or are expensive for the same reason they would buy PME.

Some examples come to mind:

NST: trades at a high PE and premium to my NPV valuation despite the gold price going down. Management (Beament's legacy lives through Tonkin) and future value (2M Oz PA target).

DVP: No profit to show for yet but has top management via Beament.

AD8: No profit yet but sales are exponential

And then there's CXL, SLX, NEU, MIN, WTC, ALU, AEF etc...

I wish I not listened here and just bought the dip at $35 last year in June 22.

We've still yet to hear a bull case here. Only that it is trading on a high PE even though we are in an era of high interest rates and recession.

Having said all this, isn't PME also a healthcare stock? If so, then shouldn't it deserve the valuation because investors flock to healthcare sector during a recession regardless of its PE?

Such a well run business - if only all my portfolio companies had these business metrics. I am the same, I just cannot stomach that PE though!

Yet another record half.

All the details are here, but some highlights include:

• Revenue up 28% to $56.9m
• NPAT up 30% to $27.2m
• Cash up 4.4% to $94.5m
• 3 major contract wins for the half.

This is the strongest half year in the company's (already impressive) history.

The company has grown its top line from $14m in 2014 to well over >$100m for FY23 (pro-rata basis). But what's truly amazing is that they have done this:

• Without raising capital, and an essentially flat share count
• Sustaining insane NET margins (now at around 50%!!)
• Paying out dividends! (divs per share are up 10x since 2014)
• Gushing cash
• Sustaining growth investments

It's a masterclass in capital management, and how structural disruption and network effects can combine to deliver incredible and long-last growth.

The only problem? My estimate for the PE on a forward basis is somewhere around 120x. I've said many times before you shouldn't overthink valuation for high quality, fast growing businesses, but still...

I retain a very small position.

When going to RNS Private Hospital last week for family reasons, the doctor pulled up the imaging software to view some scans.

I couldn't catch the name of the software, but don't think it started with a V maybe an X

So I'm wondering who are the competitors in this space, and if so, is PME overvalued? And are fund managers and institutions getting it wrong bidding the price up 50+?

Need to start doing some research...

Pro Medicus (PME) released their FY22 results today. From their release:

• Revenue from ordinary activities $93.5m – up 37.7%
• Underlying profit before tax $62.4m – up 46.8%
• Net profit $44.4m – up 44.1%
• Cash and other financial assets $90.6m – up $28.8m
• Company remains debt-free
• Fully-franked final dividend 12c per share

Another fantastic result from Pro Medicus with NPAT up 44%. Hard to believe that this company has yet reached $100m in revenue even though it is trading at a valuation of over $5.5b. IMO this is one of the highest quality companies on the ASX and their results speak for themselves.

Net margins expanded once again and the company is continually signing up new customers especially in the US. At sub $100m of revenue there is still a very long runway for growth. However shares are basically pricing in perfection at this point. Close to 60x sales and 120x PE makes it very hard for me to buy at the current share price.

Will update my valuation accordingly later.

Disc: Held IRL and on Strawman.

@edgescape - my daughter has access to Sentieo and currently it says that of 9 brokers covering PME the distribution of recommendations is:

Strong Sell - 0

Sell - 1

Hold - 1

Buy - 6

Strong Buy - 1

With an average price target of $53.13 - so on average the broker consensus appears to be buy and not sell

However when looking at what's available as far as broker reports - only Goldman and RBC appear to have recent updates (in Jun 2022, many of the others are from last year)

GS appears to have a Sell with a PT of $39.10 and RBC an Outperform with a PT of $58

In summary - it's a crapshoot as to what the brokers think, and only worse due to the distribution of timeframes over which those broker recommendations are made

I remember when CSL was $60 and almost every broker in town had a sell on it because it was too expensive

Tallying up the Sell Recos

Sell PME from both in Buy Hold Sell from May - https://www.livewiremarkets.com/wires/buy-hold-sell-5-discounted-growth-stocks-2022-05-26

Sell from Claude Walker and Luke Winchester - The call 23 June 2022 (??)

Sell from Rudi - FNArena

No buy recos

Apart from Pro-Medicus who are doing a buyback and the contraction cycle we are in (if Pro Medicus qualifies as healthcare despite the high growth multiple), I would like to see a bull thesis from a fund on Pro Medicus for a change.

Visage 7 joins the AWS Partner Network, meeting guidelines for quality architectural design. Another tick box, in their ability to leverage the cloud & sell their services quickly, whilst adhering to industry guidelines on security, reliability & availability. This is another strong endorsement of their accelerating adoption of cloud technology.

Promedicus just announced 2 contract renewals worth a combined $47m in revenue. Good to see long term renewals at increased prices

Yet another contract win for ProMedicus. This time, a $28m / 7 year deal with Allina Health.

Details here but essentially a copy and paste of all their deals. And they are winning lots.

There's nothing not to like about this business...except the price.

At 50x sales or 100x earnings -- on a forward basis -- it's just hard to wrap your head around.

Promedicus sign a 8 year $32 million contract with Inova Health System, a leading non-profit health provider in North America

2924-02508623-3A591448 (markitdigital.com)

One of the first businesses to buy during market correction would be this beast

Market getting out of steroids and now properly valuing companies.

My buy order is $40 as per valuation. I could get it cheaper but the margins are too damn juicy. While they expand revenues the bottom line expands, you can't beat that.

Part of this straw is a bit of a trip down memory lane - forgive me for this - but I think it is relevant to the straw.

Pro Medicus is a wonderful business that has a great niche as a health technology provider in the digital imaging space with its Visage radiology information system (RIS). This is a world class, world leading system which is even more powerful when combined with the Visage PACS system.

From the company’s website:

Visage RIS is a comprehensive, enterprise-class and state-of-the-art radiology information system (RIS). The Visage RIS architecture leverages modern, open-source, standard-based technology such as: RESTful Web Services, stateless URL connectivity, integrated workflow engine, powerful rules engine, PostgreSQL database and CalDAV scheduling. As an enterprise-class RIS, Visage RIS includes the following expected capabilities: Patient Registration; Billing (e.g., Private, DVA, TAC, HIC Online, Bulk-billing and Eclipse); Scheduling; Typing; HL7 Integration; Financial Reporting; PACS Integration; Digital Dictation and Voice Recognition Integration.

The complete solution for all of your organisation’s imaging needs, Visage RIS/PACS represents the pinnacle of intelligence, speed and scale, tailored for the needs of today whilst having the inherent flexibility to adapt for the future. Visage RIS, working in tandem with Visage 7, drives your imaging operations with precision, ensuring your organisation is running fast and efficiently. Patients are scheduled with ease, maximising modality utilisation, while providing a powerful communications platform connecting staff and keeping patient care as your foremost priority. Flexible workflow connects radiographers and radiologists ensuring interpretations are completed timely, with attentive productivity, by the most appropriately trained, available radiologists. Images are rapidly available for interpretation, regardless of the location of the reading radiologist, using the most sophisticated tools from a single, ultrafast clinical desktop. And when your radiologists and referrings are on the go, they quickly have access to their imaging results directly from their mobile with Visage Ease.

The company is a great wealth creator. Over the past five financial years Return on Equity has averaged 38%. But what is more impressive is that the return is increasing each year, growing from 30% in 2017 to 43.5% in 2021. If you can find companies that can compound incremental earnings at the same, or a faster clip, as historical earnings you are onto a big-time winner.

To quote Charlie Munger:

"Over the long term, it's hard for a stock to earn a much better return than the business which underlies it earns. If the business earns 6% on capital over 40 years and you hold it for that 40 years, you're not going to make much different than a 6% return—even if you originally buy it at a huge discount. Conversely, if a business earns 18% on capital over 20 or 30 years, even if you pay an expensive looking price, you'll end up with a fine result."

Of course, it is not a simple as finding businesses with high return on equity and paying any old price but it is either a great way to start searching for opportunities or a great validation for buying a business if everything else aligns.

Pro Medicus has been difficult to buy because it almost always seems expensive. However, there were plenty of buying opportunities around $17 in March 2020. This would have represented excellent value.

I first came across Pro Medicus in May 2017. It was not cheap even then, trading on an historic PE of 85x and PE for the year ending June 2017 of 60x with a relatively short trading history. Nonetheless, with earnings forecast to increase in excess of 40% and with very bullish news I leap aboard a company that seemed to tick every box. Two years later I made a huge mistake: for reasons that I did not document at the time and now seem unfathomable I sold 35% of my holding for $19 – ouch!

My current valuation is around $40: but I will only sell only sell if circumstances change, a better opportunity presents itself or for re-balancing purposes.

Promedicus continue to deliver and the future looks bright

A brief summary appears at the end of the presentation - see below. But my favourite comment was -

AI Radiologist Comment at Go Live 57 “We went from a Flintstone’s car to a Tesla.”

AGM BRIEF SUMMARY

•Most successful period in company's history

• North American footprint continues to grow strongly

• Expanded product portfolio – single vendor or modular

• Proven remote implementation & support capability

• Cloud – huge strategic advantage over competitors

• Unparalleled value proposition both Clinical and Financial ROI

• Pipeline Continues to grow strongly. • Visage AI-Accelerator - strategically positioned to leverage 

The full announcement is on the company's website, ASX and Market Index

Disc.: held in RL portfolio

Another big contract win for ProMedicus, this time signing US-based Novant Health for a 7-year, $40m contract. (~$5.7m pa)

As the company has pointed out, this is the 7th major US contract in the last 18 months.

Over the last year they've signed deals worth >$160m, typcially for 5-8 year periods -- let's call that an additional $25m per year, for a company that last year had $67m in sales. This is high margin revenue, most of which drops to the bottom line. (this is why operating margins have been growing so fast -- the fixed cost base is scaling extremely well)

The sales momentum is very strong and the company seems to enjoy a very high win rate. The team is well practiced at integrations and tends to have new customers up and running within months of signing. 

Best of all, once established, there's virtually no churn, little customer-specific costs and inbuilt revenue flex due to the transactional based nature of their contracts.

I think both scale and network advantages will continue to build too.

I love this company... just not the price. I know I shouldn't overthink value too much when it comes to such extreme quality and growth potential (which is why i still retain a small holding), but at ~85x sales it's hard to give it too much weighting in the portfolio.

18-Aug-2021:  Excellent result from PME today, which resulted in their shares closing up +15.66% @ $65.35/share, another highest-ever-closing-price - they've been setting those on a reasonably regular basis during 2021.

To watch their CEO & MD, Dr. Sam Hupert, being interviewed about the result on Ausbiz this afternoon, use the following link:  https://www.ausbiz.com.au/media/pro-medicus-ceo-on-why-fy21-was-only-the-foundation-for-better-results?videoId=13707

He's pretty bullish on the future, and discusses the tailwinds that the company currently enjoys.

There was also an interview posted as an announcement to the ASX today - for further details on that, see here:  http://www.promed.com.au/dr-sam-hupert-interview-2/

Transcript of that interview here:  http://www.promed.com.au/wp-content/uploads/2021/08/CEO-Interview-FY-Results-2021.pdf

Results details can be viewed here:

http://www.promed.com.au/pro-medicus-limited-full-year-results-5/

Company announcement of results:  http://www.promed.com.au/wp-content/uploads/2021/08/Company-Announcement-Full-Year-Results-2020-21.pdf

HIGHLIGHTS

• Revenue $67.9m – up 19.5%
• Underlying profit before tax $42.6m – up 41.0%
• Net profit $30.9m – up 33.7%
• Cash and other financial assets $61.8m – up 42.4%
• Company remains debt-free
• Fully-franked final dividend 8c per share (total for the year 15c per share)
• Record number of new contracts announced during the period
• First FDA approved AI algorithm

Disclosure:  I hold PME in my SM virtual portfolio, but not in RL unfortunately.  Clearly I was wrong thinking they looked expensive in prior months and that I might get the chance to buy them cheaper.  This is one fluffy dog I am only going to be patting virtually it would seem, rather than in RL. 

Que sera, sera.

PME signs Research Collaboration Agreement with Mayo Clinic
3 June 2021
HIGHLIGHTS
• PME signs multi-year research collaboration agreement with Mayo Clinic
• Mayo Clinic to leverage the capabilities of the Visage AI Accelerator platform
• Collaboration to facilitate artificial intelligence (AI) research and development with a
view to product commercialisation
• Builds on existing Mayo Clinic Visage 7 Viewer agreement
Leading health imaging company Pro Medicus Limited [ASX: PME] today announced its wholly owned U.S. subsidiary, Visage Imaging, Inc., has signed a multi-year research collaboration agreement with Mayo Clinic.
The agreement will serve as the framework for collaboration between the two parties to facilitate development and commercialisation in the field of AI leveraging the Visage AI Accelerator platform.
“Our AI Accelerator program was designed to closely align Visage’s engineering and product development capability with clinical research partners such as Mayo Clinic who have a depth of clinical knowledge and extensive research expertise,” said Malte Westerhoff, PhD, Visage Imaging Global CTO. “It provides a unique set of tools for data de-identification, collection, curation, analysis and ‘path-to-production’ in research projects bringing the efficiency and speed of Visage technology to research, resulting in a unified link between the two domains.”
Dr Westerhoff continued, “We see AI playing a significant role in healthcare particularly in our field of imaging IT. We have optimized our Visage 7 platform for AI enabling both our own, as well as third-party algorithms to be seamlessly integrated into the clinician’s desktop. We see this research collaboration agreement with Mayo Clinic as another significant piece of our AI strategy, one that has the potential to develop innovative AI solutions that meet well defined clinical goals and ultimately lead to better patient outcomes.”