I guess ultimately hard to decipher what the market is thinking.
My own view is price is reflecting increased confidence core earnings erosion won't occur now that FY 16 earnings signaled at $26m ebitda.
The GC practice losses will remove some +$3m ebitda - not insignificant. Maintaining ebitda at FY 2015, without additional earnings from new acquisitions contemplated, is therefore no small feat. Revenue growth demonstrating strong (demographic) generic high quality (growth) profile.
A 8 times ebitda, being quite low in the healthcare space, gives a base valuation of over $1.10, hence re rating.
Additional acquisitions, well disciplined, are a strong positive.
Discussions of this sort are a big change from where the stock has been over last 7 years.
PHG, at some $10m ebitda, with heaps of debt, somewhat problematic in comparison.
VEI Price at posting:
81.5¢ Sentiment: Buy Disclosure: Not Held
