PME - Pro Medicus

bought as a cheeky little div. payer ... who knew ( i sure as heck didn't )

but i suppose there is always 'key person risk '

you know bring in some flashy CEO , when the current guy is doing fine

on the flip-side had i not sold down , the holding would be currently 25% to 30% of my portfolio

would that make you more or less comfortable ??

Horrorscope speculations:
Dont like the chart. Some pretty strong volume has come in over the last two months and a few weekly long upper wicks made. lf you take the October trough at $50 as significant, which I do, then the break of that has brought a target of $35-30 into speculative contention. Trouble is, that would break the 'neckline' of a large irregular head and shoulders at $40. So I'm seeing $40 as the critical level and a speculative target if that doesn't hold of the Wuhan plague low - i.e $15.
Why that could happen fundamentally I don't have any idea. Maybe a general crash? The fundamentals as summarised on CommSec look stunningly attractive but the stock is ridiculously overpriced imo. Like XRO, which also has a dubious looking chart.

Weekly

finicky said:

Horrorscope speculations:
Dont like the chart. Some pretty strong volume has come in over the last two months and a few weekly long upper wicks made. lf you take the October trough at $50 as significant, which I do, then the break of that has brought a target of $35-30 into speculative contention. Trouble is, that would break the 'neckline' of a large irregular head and shoulders at $40. So I'm seeing $40 as the critical level and a speculative target if that doesn't hold of the Wuhan plague low - i.e $15.
Why that could happen fundamentally I don't have any idea. Maybe a general crash? The fundamentals as summarised on CommSec look stunningly attractive but the stock is ridiculously overpriced imo. Like XRO, which also has a dubious looking chart.

Weekly
View attachment 139009

Click to expand...

ridiculously over-priced yes i agree , partly it was boosted by being included in the XKO ( and i think the XJO ) in what was already a tightly held share

so that 'volume ' raises an eyebrow ... is somebody shorting a tightly held stock ( check out the management shareholding )



now my cost price ( not counting the immense profit already taken ) is 16.5 cents a share , so when i am looking at roughly 100% return PER YEAR ( plus franking ) on investment i am much more like to hold this a while longer

i assume it is mainly instos and fund managers that are trading this share ( on behalf of clients )

good luck if you dare swim ( trade ) in these waters

also i have seen speculation of 'key person risk ' here one would be wise to watch for management selling down ( because this has several juicy contracts that a rival might be tempted into a hostile take-over )

please take care

PME chart has deteriorated and is now teetering above the $40 level. Chart still looks like an avoid to me.
The rally from Feb was choppy and weak volume, while the subsequent fall has been rapid and higher volume - now back to the critical $40.
I'm still clinging to the hope of a 'melt-up' in the months ahead where I can add to cash and subsequently, in a big crash, buy a few PME, XRO and other highly prestigious stocks which would otherwise not deign to have me as a shareholder.

Daily

i still don't understand how this share is more than $1 ( i bought at 16.5 cents ) sure it pays divs. is fairly tightly held , etc etc

but a $40 or $60 share look at the actual income , sure the divs are juicy at MY entry price

i suppose it makes a profit and pays regular divs and that makes it better than the average WAAAX ( or whatever it is now ) stock

DYOR

part of an article that appeared in Stockhead recently:

With a market cap just under $4.7 billion, Pro Medicus is the fourth biggest ASX-listed life sciences play behind the ‘big three’ of CSL, Cochlear and Resmed.

Co-founder and CEO Dr Sam Hupert says the last 18 months have been the busiest ever for the company, “not just in terms of sales, but implementation”.

In the equal biggest deal to date, last October, the company signed up Novant Health for a $40 million contract over seven years. The transaction expands the company’s presence away from the traditional ‘sandstone’ colleges and into the non-academic sector.

In early April, the company signed up North Virginian not-for-profit Inova Health in a $32 million deal over eight years. Renewed contracts include Europe’s Allegheny Healthy, New York University’s health network, the Baltimore and Washington-based Medstar and the Utah-based Intermountain.

“The market is very active at the moment, there’s an increased cadence with RFPs (requests for proposals),” Dr Hupert says. “A lot of them require the option to work in the [internet] cloud or are mandating the cloud, which favors us.”

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Dr Hupert estimates that Pro Medicus has the lion’s share of the traditional academic market, having signed up nine of the top 20 US institutions (‘top’ is determined not just by size, but perceived quality).

“We have more than double [the market share] of our nearest competitor,” he says. “Given we have only been in that market for six or seven years, no-one has been able to do that.”

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The company is also making inroads into what our American friends call IDNs, or integrated delivery networks. These are non-academic, non-teaching hospital chains, generally not-for-profit. Intermountain and Novant Health fit this category.

Dr Hupert notes that about 500 million tests are done in the US annually, which come to think of it is 1.5 for every man, woman and child. He estimates Pro Medicus has around six percent of that broader market.

Traditionally, Dr Hupert says, the company’s competition came from the equipment vendors such as GE Health, Siemens and Philips. When camera film became redundant, the likes of Agfa, Fujifilm and Carestream also sashayed into the sector.

Dr Hupert claims these providers are losing market share at the expense of up-and-coming independent providers steeped in the digital way of doing things. Many of these providers are being subsumed by private equity ‘roll up’ plays.

The internet cloud allows Pro Medicus to sell to a Mayo or a five-person radiology clinic in Airport West.

“Cloud has made a huge difference. If a five-person practice had to buy its own hardware and organise a data centre and hire a data manager, it would be too much,” he says. “The beauty of the cloud is that it matches our billing model by which you only pay for what you use.”

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more at : https://stockhead-com-au.cdn.ampproject.org/v/s/stockhead.com.au/health/dr-borehams-crucible-picture-this-a-growth-stock-that-makes-money-pays-divvies-and-accrues-cash/?amp=&amp_gsa=1&amp_js_v=a9&usqp=mq331AQIKAGwASCAAgM=#amp_tf=From %1$s&aoh=16520486542569&csi=0&referrer=https://www.google.com&ampshare=https://stockhead.com.au/health/dr-borehams-crucible-picture-this-a-growth-stock-that-makes-money-pays-divvies-and-accrues-cash/

Growth stocks have been punished, especially at the smaller and less liquid end of the market. Think of sectors like healthcare, discretionary retail and tech.

But what does that look like in terms of numbers? Glad you asked, as our friends at Deep Data Analytics have recently crunched the numbers and it isn’t pretty.

The worst 10 performers in the small cap healthcare sector are down ~32% on average, in discretionary retail the fall is ~49% and things get ugly in tech where the worst 10 are down ~54% on average.

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No doubt many Livewire readers will have had some high-growth names on the wishlist, but couldn’t stomach the valuations. Yes, we're talking about those growth darlings that have been punished in the selling of late. It could be a bit uncomfortable, but you never know - We might uncover a few opportunities.

Here to help me talk about whether there are opportunities or not, I've got Josh Clark from QVG Capital and Gary Rollo from Montgomery Investment Management. Brace yourself, gentlemen. It's going to be a bit of a rough ride here. We're talking about discounted growth stocks and we've all had that watch list. Always told those stocks are too expensive to buy. Buy, hold, or sell ?

James Marlay: Well, we might be onto another sinner Pro Medicus. I've never had anyone tell me they think this stock looks cheap. It's down 40% year to date. Is it cheap enough now? Buy, hold, or a sell?

Gary Rollo (SELL): Not cheap enough. It's a sell. Look Pro Medicus is the inverse of what we just talked about with IDP. Great business, but the opportunity they are prosecuting just isn't big enough to give you a long enough runway to amortise that valuation envelope you're taking on. Don't take that opportunity. It's a sell.

James Marlay: It's PE gone from three digits to two digits, Josh. Can you break my run of no-one telling me Pro Medicus is cheap enough? Buy, hold or sell?

Josh Clark (SELL): Pro Medicus is on something like a 78 times pre-tax earnings multiple from here, and it's just too hard to wrap your head around how you can get enough growth out of that business to justify that multiple. I mean, there's other businesses - notably technology businesses - out there that trade on those kinds of eye-watering multiples, but then I don't think they're necessarily a fair comparison because there's a lot of businesses that have been reinvesting through the profit and loss statement and earning 0% margin. Pro Medicus is already I think it's around 65% margin. So their world-class margin is already a very profitable business. It's going to be quite hard for them to grow their earnings much faster than revenue from here. I don't think you can get there on the valuation, so a sell.

Pro Medicus broke to the lowest in a long time and with strengthened volume. As discussed, still playing perilously at a level of long term support of around $40 which is also the neckline of a one and a half years head and shoulders pattern by my completely ignorable interpretation. I think all would agree that it's overvalued, the more so in this bearish environment and there must be a lot of jumpy feeling holders.

a tightly held stock that has found itself in the XJO , i suspect traders using 'borrowed stock ' ( in the custody of fund managers ) are a big part of the action here ( much like when BKL was in a similar situation )

the valuations are crazy BUT it does pay divs. and that is what results when 'index funds ' have to hold a tightly held stock , i am in no rush to sell any more of my holding , so you were either in early ( before 2013 ) or wondering what all the fuss is about .

keep an eye out for it to be removed from the XJO ( as a result of persistent short-selling )

I'd claim that PME today confirmed its break of the $40 level which I consider significant but the hammer candle makes me cautious. Let's see what next week brings.

Not Held

Daily

Pro Medicus Limited full-year results
18 August 2022
HIGHLIGHTS
▪ 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
Leading health imaging company Pro Medicus Limited [ASX: PME] today announced a fullyear net profit of $44.4 million for the year to the end of June 2022, 44.1% higher than for the
previous corresponding period.
Revenue from ordinary activities increased by 37.7% to $93.5 million.
The company's cash and other financial assets at June 30 2022 were $90.6 million, up $28.8
million, an increase of 46.5%.
Pro Medicus announced a fully-franked final dividend of 12c per share, making the full year
dividend 22c fully-franked, an increase of 47%. The company remains debt-free.
During the year Pro Medicus announced the following key contract wins:
▪ A $40M, 7-year contract with Novant Health, Inc, a community-based Integrated
Delivery Network (IDN) headquartered in North Carolina, USA, spanning three states,
including 15 medical centres and hundreds of outpatient facilities and clinics.
▪ A $32M, 8-year contract with Inova Health System, the leading not-for-profit healthcare
provider in Northern Virginia, USA. Inova Health’s 20,000+ team members service more
than two million patient visits per year.
▪ A $28M, 7-year contract with Allina Health, a not-for-profit healthcare system based in
Minneapolis, USA, which has 28,000 employees and 6,000 associated and employed
physicians and operates 11 hospitals and more than 90 clinics throughout Minnesota and
Wisconsin.
Pro Medicus Limited
450 Swan Street Richmond
Victoria 3121 Australia
T +61 3 9429 8800
F +61 3 9429 9455
www.promed.com.au
▪ Fourth extension of the German Government contract, Visage 7.0 being deployed to a
large government hospital in the Hamburg region.
▪ Two key contract renewals with a combined value of A$47M. Sutter Health, a large
IDN based in Sacramento, California signed for a further seven years, and Wellspan
Health, based in Pennsylvania, for a further five years. Both deals were transaction-based
with committed minimums and were negotiated at a higher per transaction cost than their
original contracts.
Pro Medicus CEO Dr Sam Hupert said the result represented the best revenue and profit
performance in Pro Medicus’ history. Margins improved from 63% to 67%, and cash and other
assets rose by $28.8 million to $90.6 million despite increased spending on research and
development, a share buy-back and increased dividend payouts.
‘FY22 year was another year where all our key financial metrics headed in the right direction
and we continued to make significant progress with key implementations,’ Dr Hupert said. ‘All
three jurisdictions did very well. North America – our biggest market – was the key contributor,
with a 65% jump in transaction revenue coupled with three new material contracts and two
contract renewals. We were also pleased with the fourth extension of the German
Government contract which was material for the European region. In Australia we continued
to see incremental growth, which was pleasing.”
Dr Hupert said the steep jump in transaction revenue was driven by large implementations
including Northwestern, NYU Langone and Medstar which contributed a full 12 months of
transactions and Intermountain Healthcare which contributed 8 months.
“Revenue from recent contract wins in Novant Health, Inova Health and Allina Health will
commence in the FY23 financial year, so these three sizeable contracts are still ahead of us
and will build on the solid base we formed in FY22.’
Dr Hupert said renewals of contracts – like Sutter Health and Wellspan Health – should also
not be underestimated. ‘Our aim is to retain 100% of our client base and even though it is still
early days, we have been successful in achieving this so far,’ he said. “The fact that our
clients are renewing for five years and in some cases longer we feel is a powerful
endorsement of our offering and the leadership position of our technology.”
In August 2021, the company established its R&D centre in New York and is making good
progress with its research collaborations with NYU as well as other research partners Yale
and Mayo.
Dr Hupert said Pro Medicus’ pipeline remains strong, with a good spread of opportunities in
different market segments. ‘As we have previously mentioned, we are seeing interest from
multiple market segments, including Tier-1 academic medical centres, large and mid-sized
Pro Medicus Limited
450 Swan Street Richmond
Victoria 3121 Australia
T +61 3 9429 8800
F +61 3 9429 9455
www.promed.com.au
IDNs as well as renewed interest from the for-profit sector, which was the sector hardest hit
during COVID.”
“We also see the dynamic of Cloud as a major theme in virtually all our pipeline opportunities,
as well as a material number of opportunities considering multiple Visage products. These are
the trends that benefit us and importantly, ones we think will continue.’
** Pro Medicus Ltd will host a webcast conference call on Thursday 18 August at 11am
(AEST) to discuss the results.
Authorised by the Board of Pro Medicus Limited.

-----------------------------------------------------------------------------------------------------------------------------------------------------

DYOR

i hold PME ( 'free-carried' ) ( bought at 16.5 cents )

i guess if i regret selling down a winner ( sold down 95% of the original purchase ) this will be the one

but golly gee who would have picked this in 2011 to even break $10

22 cents a year ( plus franking ) on a share bought for 16.5 cents .. some tech shares did do very well ( just not the widely predicted ones )

HIGHLIGHTS
• PME signs 7-year, AUD $25M deal with Seattle-based UW Medicine
• Visage to replace legacy PACS throughout the UW Medicine network
• Contract includes Visage 7 Open Archive and Visage 7 Workflow in addition to
Visage 7 Viewer
• Visage 7 platform to be fully deployed in the cloud
• Continues PME’s rapid expansion into North American Tier 1 academic institutions
• Transaction-based model with potential upside
Leading health imaging company Pro Medicus Limited [ASX: PME] today announced its whollyowned U.S. subsidiary, Visage Imaging, Inc., has signed a $25M, 7-year contract with the
University of Washington’s UW Medicine, a Tier 1 academic health system based in
Seattle, Washington.
UW Medicine has multiple campuses throughout the Seattle area and employs 29,000 healthcare
professionals, researchers, and educators. It is also the home of the highly regarded
University of Washington School of Medicine.
Based on a transactional licensing model, the contract will see the company’s cloud-engineered
Visage 7 Enterprise Imaging Platform (‘Visage 7’), including Visage 7 Open Archive and
Visage 7 Workflow modules, implemented throughout UW Medicine providing a unified diagnostic
imaging platform across the network.
Pro Medicus Limited
450 Swan Street Richmond
Victoria 3121 Australia
T +61 3 9429 8800
F +61 3 9429 9455
www.promed.com.au
Pro Medicus Limited
ABN 25 006 194 752
Planning for the rollout is to commence immediately and will be based on Visage’s proven cloudbased migration and implementation process, with initial go-lives targeted for the second half of the
2023 calendar year.
UW Medicine has opted for a fully cloud-based solution, a trend that has taken a major foothold in
the North American healthcare IT market.
“UW Medicine joins our growing list of Tier 1 academic clients and will provide us with a strong
presence in the Northwest region of the United States,” said Dr Sam Hupert, Pro Medicus CEO.
“With its highly regarded University of Washington School of Medicine, it has the added benefit of
exposing Visage to an ever-increasing number of the doctors of tomorrow.”
“Our pipeline remains strong and spans all market segments, and as has been the case with many
of our recent sales, this deal is for our “full-stack” comprising all three Visage products namely
viewer, workflow and archive, a trend we see continuing.”
Authorised by the Board of Pro Medicus Limited.

=====================================================================================================

DYOR

i hold PME ( 'free-carried' )

Typical PME, an almost insignificant contract, worth just $3.5m per year to a stonk capitalised at about $4.5b. Punters will probably add more today in market cap than the contract is worth in revenue, that been the pattern over the years.

galumay said:

Typical PME, an almost insignificant contract, worth just $3.5m per year to a stonk capitalised at about $4.5b. Punters will probably add more today in market cap than the contract is worth in revenue, that been the pattern over the years.

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being tightly held ( by at least some of the management ) and a top 200 stock seem to be the explanation

i just watch in amazement ( but DON'T beat myself up over the 95% of the holding sold , as it climbed and climbed )

Yes its certainly been an amazing run. Its a good reminder that you don't need to big many really big winners, if you have a solid process and the conviction to hold at at least some of them as the price runs a long way ahead of value. Must be one of your best picks over the years?

galumay said:

Yes its certainly been an amazing run. Its a good reminder that you don't need to big many really big winners, if you have a solid process and the conviction to hold at at least some of them as the price runs a long way ahead of value. Must be one of your best picks over the years?

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easily my best , but not my only 10-bagger

but totally unexpected when i bought in , in my wildest dreams i thought it might get to ONE dollar about now

well one thing that helps the decision to hold ( SOME of them ) is the ability to pay fairly regular divs.

for example i used to hold a tiny oil producer ticker code OTE ( @ 1.4 cents a 'new share' , one day they were involved in a reverse take-over and re-emerged as ISX , now i watched in fascination as the share price kept climbing and climbing , BUT no real hint of paying a div. anytime soon , so one day it hit $1 and i sold out , shortly before ( about a week ) ASIC/ASX decided to suspend it from trading.

I have a few 10 baggers, but nothing like PME for you! Kudos.

I think all of mine I had a fair bit of conviction that they were grossly undervalued and multi bagging was a possibility, thats partly what helped me hold as they went form cheap to expensive.

Definitely helps if they pay a divvy, all of my multibaggers did, very little I buy doenst.

Re OTE, sometimes we just get dead lucky!

some started out paying a div ( HIL , TEG , MML/X64 , KRM ) ( when i bought in )

the funny part of the PME buy was ( apart from it paying divs. ) was it was bought for the healthcare sector exposure in a way i could understand , i had a hobby in computers )

NORMALLY i am wary on healthcare ( especially 2011 to 2013 ) and worried about government regulation , and approval changes , so avoided new 'wonder treatments' , healthcare facilities ( except dentists ) trying to lower the risk in small cap( and mid cap ) health sector plays ... ( i avoided uranium , and rare earth plays on the same logic )

remember in 2011 i was just starting out .. but had to RUSH ( to set up that 'income fund ' in less than ten years , ready in 1st January 2020 )

now my personal health put a kink in that plan , but that was the plan in 2011 ( AND not blow the cash i had inherited on the way )

probably the most interesting twist to PME is i don't remember any take-over offers for it , sure management with a large stake is a deterrent , but doesn't make one impossible , back in the $1-$5 share price range , you would have thought PME was a better buy ( take-over target ) say , than a franchise of dentists (ONT ) , or an aged care chain ( retirement homes )

imagine if HIL had made such a take-over play when cashed up from exiting the KOV holding ( as an example )

hanging in. Nice margins.