{"id":1135696,"date":"2019-08-29T10:30:49","date_gmt":"2019-08-29T15:30:49","guid":{"rendered":"http:\/\/oilandgas-investments.com\/?p=22309"},"modified":"2019-08-29T10:30:49","modified_gmt":"2019-08-29T15:30:49","slug":"this-company-makes-money-and-grows-like-crazy","status":"publish","type":"post","link":"https:\/\/juniorminingnews.com\/?p=1135696","title":{"rendered":"This Company Makes Money AND Grows Like Crazy"},"content":{"rendered":"

Pretty much every tech company I cover at sister publication investingwhisperer.com<\/a>\u00a0had a great Q2.\u00a0 Revenue and EBITDA<\/span> were up \u2013 but it didn\u2019t always make a difference to the stock.<\/p>\n

But it sure made a big difference for Assure Holdings (IOM-TSXv \/ ARHH-OTCQB<\/strong>).<\/span>\u00a0 I wrote to you about Assure a few weeks ago, holding it up as the poster child for the types of non-energy companies I cover at Investing Whisperer.<\/p>\n

Denver-based, the company has a unique business model that provides neuro (you know, like brain)-monitoring during surgeries.\u00a0 It\u2019s an extra layer of insurance that tells the surgeon if the patient is having any reaction during a surgery.<\/p>\n

Assure announced a great Q2 on Thurs Aug 29:<\/p>\n

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  1. Number of procedures (surgeries) monitored up 109% to 1466<\/li>\n
  2. Revenue up 137% to $8.4 million YoY<\/li>\n
  3. Adjusted EBITDA<\/span> up 256% to $5.7 million \u2013 a HUGE jump<\/li>\n
  4. Gross margin was up to 79% from 70%<\/li>\n<\/ol>\n

    Normally, growth costs money.\u00a0 But Assure is generating cash every month while growing this fast.\u00a0 They actually have net income.\u00a0 It\u2019s such a strong business model, Executive Chairman John Farlinger decided to\u00a0 become permanent CEO and stay as Chair.<\/p>\n

    They\u2019re expanding geographically \u2013 they started in Colorado but now expect to be in 9-10 states by year end.<\/p>\n

    They have enough critical mass now that they are cancelling all their third-party billing \u2013 for which they paid 8% of receivables and had to wait months (often over a year) to get paid.\u00a0 Under the new billing Joint Venture they announced, they are effectively bringing the billing in house \u2013 they are now paying themselves.<\/p>\n

    On a $30 million run-rate, that is a $2.4 million savings.\u00a0 Assume they actually net 50% of that (they still have to pay their in-house people) but as revenue ramps up, this becomes a greater and greater savings.<\/p>\n

    With this new JV, Assure expects to increase the gross amount of receivables and increase the speed of collections, all the while greatly increasing the number of surgeries.\u00a0 That\u2019s a slingshot of revenue, if they can make it happen.<\/p>\n

    Collecting receivables have been The Big Negative here (witness the big writedown earlier this year) and even in this quarter, growth in cash actually collected is not as much as revenue growth.\u00a0 That\u2019s what CFO Trent Carman and Paul Webster were specifically brought in for.<\/p>\n

    There were three very important initiatives announced on the conference call.\u00a0 One was the move to in-house billing as I\u2019ve just spoken to.\u00a0 The second was management saying they are ready to grow via acquisition, which would mean bringing surgeons and the practice in-house.\u00a0 I\u2019m not sure how that will work, but I\u2019ll see what colour they\u2019re willing to give on that in a call with CEO Farlinger later.<\/p>\n

    The third initiative is taking some of their procedures \u201cin-network\u201d \u2013 i.e. agree on a pricing schedule with a major US national insurance company for their neuro-monitoring.\u00a0 Right now Assure is almost all \u201cOut-of-Network\u201d, which means they negotiate with the insurers on each surgery.\u00a0 That\u2019s why receivables are low and slow.<\/p>\n

    Going \u201cIn-Network\u201d will mean a bit less money, but quicker and more certain payment.\u00a0 I expect this to result in a higher multiple for the stock over time, as the Market values a lower but longer, steady revenue stream over a big upfront payment.<\/p>\n

    Other than receivables still being a bit slow, the only negative in the whole story is that they are a Canadian listed small cap stock in a market that is shunning Canadian listed small cap stocks.<\/p>\n

    I see lots of growth here \u2013 growth in # of surgeries, growth in speed and amount of receivables, growth in # of states in which they are operating \u2013 and throughout all this, I expect them to continue generating cash (though of course, if they grow too fast, there may be a few months that doesn\u2019t happen).<\/p>\n

    The stock was up 20% on volume on the day they announced their good numbers. It\u2019s important to me to see the stock perform on good news.\u00a0 In energy-land, that rarely happens (Canadian junior oil producers continue to churn out huge Free Cash Flow and trade at just 3x cash flow-CRAZY!).\u00a0 I notice volume on the US listing, ARHH, is also picking up.<\/p>\n

    Overall, I couldn\u2019t have asked for anything better.\u00a0 Great numbers, a more visible growth runway, and the stock responds.\u00a0 No analyst coverage, no institutional ownership.\u00a0 Management owns a huge chunk of the stock. Positive cash flow; high gross margins. This is the kind of company I\u2019m trying to uncover all the time at\u00a0www.investingwhisperer.com. <\/a><\/p>\n

    I think this stock and several others at my other service are going higher.\u00a0 Sign up for a trial subscription today \u2013\u00a0click HERE<\/a><\/p>\n

    \n



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    3r5723475234957asdgvaisduthadsfg)<\/small><\/p>\n","protected":false},"excerpt":{"rendered":"

    Pretty much every tech company I cover at sister publication investingwhisperer.com had a great Q2.  Revenue and EBITDA were up – but it didn’t always make a difference to the stock. But it sure made a big difference for Assure Holdings (IOM-TSXv \/ ARHH-OTCQB).  I wrote to you about Assure a few weeks ago, holding it […]<\/p>\n","protected":false},"author":19,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[528],"tags":[],"_links":{"self":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1135696"}],"collection":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/users\/19"}],"replies":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1135696"}],"version-history":[{"count":116,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1135696\/revisions"}],"predecessor-version":[{"id":1146034,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1135696\/revisions\/1146034"}],"wp:attachment":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1135696"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1135696"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1135696"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}