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PGC - Paragon Care

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piggybank

piggybank

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Paragon Care Limited (PGC) is a provider of integrated services to Australia's health and aged care markets. The Company supplies durable medical equipment to hospitals, medical centres and aged care facilities through its five businesses - AxisHealth, Iona Medical, Volker Australia, Rapini and GM Medical. It is presently trading at around a P/E of 14X, as well as having a fully franked dividend with a yield of 3%;):)

This isn't a ramp up of the stock but one that came up on my scan yesterday and looked pretty interesting. Please DYOR

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I once attended a meeting at Paragon Care, was offered a glass of water and after I had finished I noted not one, but two flies in the glass. I should have been concerned when the guy took a glass off a shelf in the boardroom. Two flies and I didn't get the business. I rate this stock avoid. :p:
 
Although the earnings growth seems impressive I would advise caution towards being long on the company.

The first reason is because of the large number of acquisitions the company made over the past few years. For companies that make a lot of acquisitions, historically speaking the odds of stuffing things up over the long-term is high.

The second reason for caution is if you look at the board of directors, the chairman Shane Tanner is also on the board (chairman) of Funtastic which has performed very poorly (in terms of earnings) over the past few years, and another director was formerly managing director of Pental PTL - formerly Symex corporation, which if you look at performance under his tenure was mediocre at best. One director Geoffrey Sam is sitting on 5 boards at the same time perhaps indicating that he lacks time to discharge his duties properly. The company has a managing director, the marketing manager also sits on the board, and also the chief operating officer is an alternate director (its generally considered bad corporate governance to have management sitting on the board).

So in short the company makes too many acquisitions and the board of directors is a mess due to a conflict of interest due to management members being on the board (three), directors (two) who sit on boards (or previously did) of poorly performing companies, and one director who has arguably too many directorships and is merely a fee sucking professional director.

Also the accounting is aggressive. Also the net tangible assets of the company is negative due to the huge amount of goodwill from acquisitions. This negative NTA contrasts to the roughly $38 million of interesting bearing debt in the last annual report. Also the company's capital management policies are highly cynical. The company keeps issuing more shares to raise acquisition capital whilst simultaneously increasing its dividend whilst operating a DRP. The dividend payments are just a marketing exercise to push up the share price to make equity raising cheaper. In my opinion in the future the company will continue to ask shareholders for more money (share issues/placements and DRP) over time than what they pay out in dividends.
 
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I've been holding this for a while now, looks like we may be parting company tomorrow if it doesn't get back above 0.76.

(weekly chart - click to expand)
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I think (hope..) Paragon will get it's act together in 2019 and become a go to company for medical supplies.
I think it has been oversold and will bounce back in 2019.
 
Paragon management has a tough start today even with the encouraging market outlook the stock price got a whip. More than $1 M turnover with 10% slump, within market opened and trading halt removed. What was the expectation ? Royal Commission on Aged Care ?

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@rederob elsewhere asked if suppliers to hospitals could do well.
supply of durable medical equipment, medical devices and consumable medical product to the health and aged care markets throughout Australia and New Zealand.
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Here's one that, to date, seems to be making a fist of it
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In their last report they mentioned having troubles collecting receivables because of a bungled rollout of a new ERP.
What a time to be in that business but having issues chasing basic accounts! Laughable.
 
CBerg said:
In their last report they mentioned having troubles collecting receivables because of a bungled rollout of a new ERP.
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also laughable; chasing some former employees and the vendor of a WA acquisition for loss of contracts.

sound like the gang that couldn't shoot straight
 
This isn't a stock I normally follow but just drawing to attention of those interested that the past two days had very high volume, highest since February 2019, with price up from 12c to a high of 22.5c on the 24th June and back down to 17c on the 25th.

According to the company's news announcement they see some improvement in the business. :2twocents
 
Smurf1976 said:
This isn't a stock I normally follow but just drawing to attention of those interested that the past two days had very high volume, highest since February 2019, with price up from 12c to a high of 22.5c on the 24th June and back down to 17c on the 25th.

According to the company's news announcement they see some improvement in the business. :2twocents
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The company sees some improvement. Lol. Why? They are not near record lows for no reason you know? Does the company think they are going to get more competent at shooting the side of a barn door?
 
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Clansman said:
The company sees some improvement. Lol. Why? They are not near record lows for no reason you know? Does the company think they are going to get more competent at shooting the side of a barn door?
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New CEO last December and subsequent staff and board changes, rationalisation within the business selling off low profit part and improvements starting to show. Not unremarkable, just smarter CEO putting in place a better business plan for which the benefits are starting to show. In my view this business will grow.
 
Country Lad said:
New CEO last December and subsequent staff and board changes, rationalisation within the business selling off low profit part and improvements starting to show. Not unremarkable, just smarter CEO putting in place a better business plan for which the benefits are starting to show. In my view this business will grow.
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Just what the ASX doctor ordered. Another turn around story that never turns around. Wow, they put in a new CEO last December and the share price was close to 50 cents, having slipped from over 90 cents 2 years prior. Now the share price sits at 19 cents with this new "smarter" CEO putting in place a better business plan for which the benefits are starting to show...LOL
 
Clansman said:
Now the share price sits at 19 cents with this new "smarter" CEO putting in place a better business plan for which the benefits are starting to show...LOL
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@Clansman, you may not have noticed but in the meantime we have had a pandemic and a bit more than a small downturn in the market. Let's see where this one is in 6 months.
 
Country Lad said:
@Clansman, you may not have noticed but in the meantime we have had a pandemic and a bit more than a small downturn in the market. Let's see where this one is in 6 months.
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@Country Lad, you may not have noticed, but the share price was well and truly on the slide well before the pandemic had any impact or social distancing was occurring. In fact its done nothing but fall for the past 3 years. The market did not. Yes let's see where it is in 6 months but the recurrent theme here is this lot have been failing for a very long time.
 
Country Lad said:
New CEO last December and subsequent staff and board changes, rationalisation within the business selling off low profit part and improvements starting to show. Not unremarkable, just smarter CEO putting in place a better business plan for which the benefits are starting to show. In my view this business will grow.
Click to expand...

This is not going well for you. Suggest you re-visit your view.
 
i noticed they just paid a dividend ... 0.6c. ..so they're still around.

Still distributing healthcare stuff, took on an acquisition, aiming for organic growth and M&A. New CEO.

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DNH
 
i hold

they have been a patience tester for me

but am looking for 'safe-havens' with growth potential , so am very cautiously adding during the slide
 
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