PHM Gains on Report On Business Story

Out top spec pick ( picked at $1.11  ) gained Monday closing at $1.46 on a feature in the Globe and Mail Report On Business :

Being a top performer on the TSX Venture Exchange doesn’t exactly set the investing community abuzz these days.

One of the elite listings on the lowly Venture of late is Patient Home Monitoring Corp., which has unleashed a wave of acquisitions to bring about a quintupling in share price over the last year.

Now big enough to have overcome most of the startup risks associated with Venture names, but not so big that investor hype has priced in a growth premium on the stock, Patient Home Monitoring still has plenty of room to grow.

“Normally one hears of stocks that the ‘easy’ money has been made,” Beacon Securities analyst Doug Cooper said in a recent note. “However, we believe with PHM, the opposite is the reality.”

Underlying the company’s business model are some powerful trends in U.S. health care. An aging population, combined with capacity strains on health-care facilities, have ensured a high growth rate in the home-based health-care services market.

“In a period of uncertainty in the economy, we believe the U.S. health-care service industry, especially one catering to the aging baby boom generation, offers a relatively safe haven,” Mr. Cooper said.

Patient Home Monitoring focuses on three major categories of illness – diabetes, pulmonary and cardiac – to offer multiple services to the chronically ill.

While listed in Canada, the company targets the highly fragmented U.S. home monitoring market, acquiring smaller regional businesses that need capital to expand.

Investors tend to look upon roll-up strategies with some skepticism, in part because they end up relying exclusively on acquisitions for growth. Patient Home Monitoring, on the other hand, is able to combine acquisition-based growth with considerable organic growth.

It does so through its expanding patient database. While takeover targets ideally have strong revenues and earnings, and are available at favourable prices, an extensive client list is a top priority in hunting for new deals.

“Through mining the aggregate patient database, PHM will cross-sell its various services thus driving revenue-per-patient growth,” Mr. Cooper said. “For example, those with pulmonary issues have a high probability of a cardiac condition … [and] a high probability of being overweight/obese that could require a power mobility solution.”

In the fiscal first quarter, the company generated organic annualized revenue growth of 34 per cent year over year, Mr. Cooper calculated.

And the company’s growing acquisition pipeline should mean much more growth of both kinds. Having already closed two deals this year, Patient Home Monitoring has three pending acquisitions which will just about double the size of the company, generating annual sales of about $125-million by the summer. By the end of this year, the company is targeting $175-million in annual revenue. Sales in 2014 amounted to $21.2-million.

And previous company guidance has consistently proven conservative, said Bruce Campbell, president and portfolio manager at StoneCastle Investment Management Inc., which owns shares of the company. “They’ve been fairly cognizant of not trying to over promise.”

Michael Dalsin, the company’s CEO, has said he thinks $1-billion in revenue is a realistic mark for Patient Home Monitoring, eventually. That 10-figure top line mark might come into view much sooner than many expected, considering the company’s pace of acquisitions.

In the first two months of this year alone, Patient Home Monitoring issued letters of intent or term sheets to 12 companies with combined annual revenues of more than $141-million. Non-disclosure agreements – which are the first step in identifying targets – were signed with another 40.

That kind of growth makes the company’s valuation a moving target. “The real difficulty is trying to figure out what multiple you should put on these things,” Mr. Campbell said. He estimates the stock is trading at an enterprise value to EBITDA (earnings before interest, taxes, depreciation and amortization) ratio of a little less than 10 times, based on future earnings the company has publicly declared.

Mr. Cooper said the company’s growth already realized and yet to come should warrant a multiple in the upper end of the range of 10- to 12-times forward EBITDA, which results in a target price of $1.75. Mr. Cooper is currently the only sell-side analyst covering the stock, according to Bloomberg.

While the stock has risen by more than 60 per cent this year so far, Patient Home Monitoring is now a safer play than it was a year ago, when investors had little proof that the company could execute its roll-out strategy and cross-sell its services, Mr. Cooper said. Plus, the company’s clean balance sheet increases flexibility and lowers risk.

“All of those fears should be dispelled now,” Mr. Cooper said.

Patient Home Monitoring (PHM)

Friday close: $1.39, up 4¢

TESLA Announcement on April 30 – Home Battery ?

Elon Musk May Have Scooped Tesla’s Big Announcement
It’s a big deal, but shouldn’t come as a surprise.
Don’t Miss Ou

Elon Musk is about to announce a new product that’s not a car. He said so in a mysterious Tweet designed to induce the highest level of nail-biting suspense. But the Elon Musk of two months ago may have told us exactly what we should expect.
“We are going to unveil the Tesla home battery, the consumer battery that would be for use in people’s houses or businesses fairly soon,” Musk said during an earnings conference call in February. He said the product unveiling would occur within the next month or two.
Here’s his teaser from today, which drove up shares of Tesla 3.5 percent:

Tesla is building the world’s biggest battery factory in Nevada — a $5 billion project that Musk says will reduce the price of battery storage by 30 percent. Combining solar panels with backup capacity could allow homeowners to avoid buying electricity from utilities. If the prices come down enough, it could both enhance and disrupt the U.S. power grid.
Last year, Musk said his home-storage battery will be “cool”—a word not often applied to hunks of hardware kept in basements. Here’s how he described it in a conference call in May:
“The sort of thing we have in mind is something that looks a bit like the battery pack in the Model S… something really flat… coming just five inches off the wall, a beautiful cover, integrated bidirectional inverter, and it’s just plug and play.”
Jargon alert: “integrated bidirectional inverter” basically means electricity can flow where you want it to, and “plug-and-play” means it’s easy to set up.
If indeed Tesla launches a battery, it will be a big deal. It just shouldn’t be that much of a surprise.
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FRO – Zacks says “Abandon Ship “

What Falling Estimates & Price Mean for Frontline (FRO) – Tale of the Tape

imilar to wise buying decisions, exiting certain underperformers at the right time helps maximize portfolio returns. Selling off losers can be difficult, but if both the share price and estimates are falling, it could be time to get rid of the security before more losses hit your portfolio.

One such stock that you may want to consider dropping is Frontline Ltd. (FRO), which has witnessed a significant price decline in the past four weeks, and it has seen negative earnings estimate revisions for the current quarter and the current year. A Zacks Rank #4 (Sell) further confirms weakness in FRO.

A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen 2 estimates moving down in the past 30 days, compared with no upward revision. This trend has caused the consensus loss estimate to widen, going from a loss of 1cent a share a month ago to its current level of a loss of 14 cents.

Also, for the current quarter, Frontline has seen 1 downward estimate revision versus no revision in the opposite direction, dragging the consensus estimate down to 3 cents a share from 11 cents over the past 30 days.

The stock also has seen some pretty dismal trading lately, as the share price has dropped 14.7% in the past month.

So it may not be a good decision to keep this stock in your portfolio anymore, at least if you don’t have a long time horizon to wait.

If you are still interested in the transport shipping sector, you may instead consider a better-ranked stock – Ardmore Shipping Corporation (ASC). The stock currently holds a Zacks Rank #1 (Strong Buy) and may be better selection at this time.

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Oil Hits Two-Week High on Dollar-Fueled Rally – Yemen:Shipping Chokepoint

Oil storage in tanks on the edge of town in Cushing, Okla.

 

Trader cites added impact of Middle Eastern conflicts on pricing
Updated March 25, 2015 4:06 p.m. ET

Oil prices surged to their longest winning-streak in more than a month as the weakening dollar continues to fire up a rally despite a historic glut of oil.

U.S. oil pushed to the verge of $50 a barrel for the first time since March 9. Four straight sessions of gains matched a winning streak from late January and early February. The market hasn’t had a five-session winning streak since June, when Islamic State militants were threatening the Iraqi capital.

Middle Eastern conflicts could have played a role Wednesday as news spread of Saudi Arabia building up forces near Yemen, said trader Tariq Zahir. But the dollar was likely the main factor behind the rally, Mr. Zahir and others said.

Oil has been rallying for most of the past week, since the Federal Reserve ratcheted back expectations for a rate increase. That news started the dollar’s retreat from a historic high, which has since fueled an inverse price move in oil.

Oil prices moved in tandem with the dollar, especially in the past four months, analysts said. Dollar-priced commodities like oil become more affordable for holders of other currencies as the dollar depreciates.

Some traders have been buying on expectation of the tandem move. Others have been buying oil simply because they are looking for other trades now that the dollar’s long rally may be over, traders and brokers said.

“It’s the hope of U.S. dollar going down and production going down in the U.S.—without [the traders] fully thinking about it,” said Mr. Zahir, who is bearish on oil prices.

Light, sweet crude for May delivery settled up $1.70, or 3.6%, to $49.21 a barrel on the New York Mercantile Exchange. That is its highest settlement since March 9.

Brent, the global benchmark, gained $1.37, or 2.5%, to $56.48 a barrel on ICE Futures Europe, its highest settlement since March 12.

It could be a panic move and a mistake, said Bob Yawger, director of the futures division at Mizuho Securities USA Inc., comparing the rise to the last winning streak when traders bought into oil as rig counts started to fall precipitously. With rigs out of work, hopes grew that production would soon decline. Instead, production has kept growing.

“They think they have this newfound gem of an information point, and then they realize” the fundamentals rule, Mr. Yawger said.

 

I
The market briefly lost ground on news that U.S. producers added to a historic glut, but rebounded within about 90 minutes and kept rallying for the rest of the afternoon.

U.S. oil inventories rose by 8.2 million barrels in the week ended March 20 to 466.7 million barrels, the U.S. Energy Information Administration said, outdoing a 5.6-million-barrel increase expected in a Wall Street Journal survey of traders and analysts.

Stockpiles are at a high in weekly data going back to 1982. In monthly data, which don’t exactly line up with weekly data, inventories haven’t been this high since 1930.

Stockpiles in Cushing, Okla., a key storage hub and the delivery point for the Nymex contract, rose by 1.9 million barrels to 56.3 million barrels, adding to its highest level on record in data going back to April 2004. The EIA said in September that Cushing’s working storage capacity was 70.8 million barrels.
Domestic crude production also slightly edged out the weekly record it set last week of 9.4 million barrels.

“Bottom line, we’re filling up those stockpiles and as long as refinery operations are subdued, we’re going to see these” additions, said Mark Waggoner, president of brokerage Excel Futures. “This is about the time we ought to sell.”

Gasoline stockpiles fell by 2 million barrels, more than the 1.7 million-barrel drop expected by analysts surveyed by the Journal.

Front-month gasoline futures settled up 2% at $1.8365 a gallon.

Distillate stocks, including heating oil and diesel fuel, fell by 34,000 barrels, less than the 500,000-barrel drop that analysts had expected.

Diesel futures settled up 1.3% at $1.7283 a gallon.

Bloomberg) — While Yemen contributes less than 0.2 percent of global oil output, its location puts it near the center of world energy trade.

The nation shares a border with Saudi Arabia, the world’s biggest crude exporter, and sits on one side of a shipping chokepoint used by crude tankers heading West from the Persian Gulf. Global oil prices jumped more than 5 percent on Thursday after regional powers began bombing rebel targets in the country that produced less than Denmark in 2013.

Yemen’s government has collapsed in the face of an offensive by rebels known as Houthis, prompting airstrikes led by Saudi Arabia, the biggest producer in the Organization of Petroleum Exporting Countries. The Gulf’s main Sunni Muslim power says the Houthis are tools of its Shiite rival Iran, another OPEC member, and has vowed to do what’s necessary to halt them.

“While thousands of barrels of oil from Yemen will not be noticed, millions from Saudi Arabia will matter,” said John Vautrain, who has more than 30 years’ experience in the energy industry and is the head of Vautrain & Co., a consultant in Singapore. “Saudi Arabia has been concerned about unrest spreading from Yemen.”

Yemen produced about 133,000 barrels a day of oil in 2013, making it the 39th biggest producer, according to the U.S. Energy Information Administration. Output peaked at more than 440,000 barrels a day in 2001, the Energy Department’s statistical arm said on its website.

Shipping Chokepoint

Brent, the benchmark grade for more than half the world’s crude, gained as much as $3.23, or 5.7 percent, to $59.71 a barrel in electronic trading on the London-based ICE Futures Europe exchange on Thursday. West Texas Intermediate futures, the U.S. marker, jumped 5.6 percent to $51.98 on the New York Mercantile Exchange.

“Yemen is not an oil producer of great significance but it is located geographically and politically in a very important part of the Middle East,” said Ric Spooner, a chief strategist at CMC Markets in Sydney.

 

Energy Sector Dealmaking On Pause- As Buyers Eye Bottom

Oil in Storage Rises More Than Expected Again

“You’re not going to lose anything by waiting,”

(Bloomberg) — When Whiting Petroleum Corp. put itself up for sale this month, the oil industry appeared on the brink of a deal surge that would dramatically redraw the energy landscape.

Instead, Whiting decided it was better off selling shares and borrowing more money to surmount a cash shortfall brought on by tumbling crude prices. The lesson? Takeover fever driven by the oil-market crash is yet to really heat up because share prices haven’t fallen as fast or hard as crude.
It may be later this year or early 2016 before buyout candidates resign themselves to a long-term market slump and lower valuations, said David Zusman, chief investment officer at Talara Capital Management LLC.
“Nobody wants to catch a falling knife,” said Chris Pultz, portfolio manager of a merger-arbitrage fund at Kellner Capital in New York. “The last thing anyone wants to do is price a deal now, only to have oil fall to $30 a barrel later on. There’s a lot of skittishness.”
Whiting, a potentially juicy prize as the biggest oil producer in North Dakota’s Bakken shale, isn’t the only one fending off bargain seekers. Tullow Oil Plc, an Africa-focused group seen as a perennial takeover target, earlier this month tapped lenders to restore its finances. In North America, Encana Corp., Noble Energy Inc., RSP Permian Inc. and Carrizo Oil & Gas Inc. have sold new shares, effectively blocking deals.
Lesser Evils
For oil producers squeezed by heavy debt and a collapse in crude prices below $50, issuing new shares and rolling over old loans, when given the choice, remain lesser evils than a corporate fire sale. So far this year, the oil and natural gas sector has seen deals worth nearly $1.9 billion, the lowest quarterly figure in at least five years, according to Bloomberg data. In the first quarter of 2014, energy deal making reached $27.9 billion.
“Every time there’s a market downturn, you always have this chorus of suggested interest in takeovers,” said Vincent Piazza, global energy research coordinator at Bloomberg Intelligence in New York. “In reality, few deals of any consequence occur.”
A disconnect between company valuations and the crude market is adding to buyers’ uncertainty. Since Dec. 15, stock values in an index of 20 U.S. producers have bounced back an average 7 percent, even as oil fell another 15 percent to $47.51 a barrel on Tuesday.
Second Half
The price crash was so swift that many companies may be waiting for the market to stabilize before agreeing to major acquisitions, said Osmar Abib, who leads the global energy practice for Credit Suisse Group AG.
“You’re going to see a much bigger flow of announcements in the second half of the year because by then, people will have adjusted to the new environment,” Abib said Tuesday in an interview.
Buyers and sellers need time to find common ground on valuations, Scott Sheffield, chief executive officer at Pioneer Natural Resources Co., said Tuesday in an interview at the Howard Weil Energy Conference in New Orleans.
“It’s going to take at least mid-summer or late in the year for oil prices to bottom and to start going up again and for people to develop their own views,” Sheffield said.
Much will depend on where oil prices settle. Sheffield said he sees a rebound to $60 a barrel by the end of the year, with prices ranging from $60 to $80 over the next five years. A $60 price over the long term will lead to more consolidation, he said.
Rising Rates
Another possible deal-driver: the availability of capital from loans and equity offerings may dry up, particularly if the U.S. Federal Reserve increases interest rates.
Dealmaking hasn’t completely ground to a halt. Whiting, based in Denver, paid $1.8 billion in stock and assumed $2.2 billion in debt in December to close on the purchase of Bakken rival Kodiak Oil & Gas Corp., a deal announced in July, when crude was still above $100 a barrel.
That same month, Spain’s Repsol SA agreed to pay $8.3 billion in cash and assume $4.66 billion in debt for Canada’s Talisman Energy Inc. The transaction has yet to close.
Companies that own drilling rigs and provide equipment and field services to the producers are most prone to consolidation during bear markets, Piazza said. During the last crude slump in 2009-10, 247 oilfield-services deals with a combined value of $32 billion dwarfed the 51 transactions among oil producers, which amounted to just $6.6 billion, he said.
Blackstone, Carlyle
Money is certainly waiting in the wings for a flurry of acquisitions. The world’s four largest buyout firms, including Blackstone Group LP and Carlyle Group LP, have amassed a $30 billion war chest for deals.
“This is one of the best periods, if not the best, to invest in global energy,” said Marcel van Poecke, head of Carlyle International Energy Partners.
Piazza of Bloomberg Intelligence said the biggest oil companies are more likely to snatch up individual assets and business units of smaller rivals, rather than acquire entire corporations. Exxon Mobil Corp. is among buyers indicating they’re particularly interested in acquiring drilling assets that expand on their existing oilfields.
For those companies with an appetite for wholesale corporate takeovers, the best approach may be to bide their time, said Jack A. Bass tax strategist .
“You’re not going to lose anything by waiting,” Jack A. Bass advises clients. “You’ll probably get it cheaper a few months from now.”

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Greece Is Now ‘Lose-Lose Game’

 

 

(Bloomberg) — The chances of Greece leaving the euro area are now 50-50 and the country could go “down the drain,” billionaire investor George Soros said.

“It’s now a lose-lose game and the best that can happen is actually muddling through,” Soros, 84, said in a Bloomberg Television interview due to air Tuesday. “Greece is a long-festering problem that was mishandled from the beginning by all parties.”

Greek Prime Minister Alexis Tsipras’s government needs to persuade its creditors to sign off on a package of economic measures to free up long-withheld aid payments that will keep the country afloat. Since his January election victory, the leader has tried to shape an alternative to the austerity program set out in the nation’s bailout agreement, spurring concern that it may be forced out of the euro.

The negotiations between Tsipras’s Syriza government and the institutions helping finance the Greek economy — the European Commission, European Central Bank and International Monetary Fund — could result in a “breakdown,” leading to the country leaving the common currency area, Soros said in the interview at his London home.

“You can keep on pushing it back indefinitely,” making interest payments without writing down debt, Soros said. “But in the meantime there will be no primary surplus because Greece is going down the drain.”

“Right now we are at the cusp and I can see both possibilities,” he said.

The start of quantitative easing by the ECB at a time when the U.S. Federal Reserve is considering raising interest rates “creates currency fluctuations,” said Soros, one of the world’s wealthiest men with a $28.7 billion fortune built partly through multi-billion dollar trades in currency markets, according to the Bloomberg Billionaires Index.

Ukraine Risk

“That probably creates some great opportunities for hedge funds but I’m no longer in that business,” he said. The war in eastern Ukraine between government forces and rebel militia supported by Russia’s President Vladimir Putin concerns Hungarian-born Soros the most, he said.

Without more external financial assistance the “new Ukraine” probably will gradually deteriorate and “become like the old Ukraine so that the oligarchs come back and assert their power,” he said. “That fight has actually started in the last week or so.”

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Apple Valued at $ 180

Cantor Fitzgerald sets Apple’s market value at $1 trillion

Having factored in the Watch, Apple TV, cash, the iPhone in China and rumors about other stuff, like cars.

Cantor Fitzgerald’s Brian White, whose neck was already stuck out further than the rest of the sell-side Apple analysts, stuck it out even further Monday.

His old price target, $160, was the market high. With his new price target, $180, he’s betting that within 12 months Apple’s market capitalization (stock price times number of shares outstanding) will have passed $1 trillion.

To put that number in perspective, the total value of the gold mined in all of history, according to the World Gold Council, is roughly $8.5 trillion.

As White sees it, Apple is firing on all cylinders:

Next month, Apple will enter its first new product category in five years, while media reports over the past several weeks have highlighted potential new areas of future innovation. Also, we believe Apple’s iPhone portfolio and position in China have never been stronger. Finally, Apple has shown its commitment to returning cash to shareholders, and we expect more in April. We believe the combination of these forces will drive the market to reward Apple’s stock.”

Below: Our current spreadsheet of analysts’ 12-month price targets, as up to date as we can make it. Corrections appreciated.

 

targets