Maybe you can outline a case for how you think the company will...

Maybe you can outline a case for how you think the company will turn revenues upwards in a market duopoly with cut price smaller operators and limited demand?


@Fidosnos,

When it comes to investing in any given stock, there are two key elements to consider, namely:


1. What are the prevailing the circumstances of a stock (both internal, and external)?

and

2. How is the stock priced for those particular circumstances?


My long-held observation is that the vast majority of investors tend to focus exclusively on the former element (as does your question), whereas my investment in @MVF is predicated far more on the latter.

In other words, "Yes, things are currently tough for MVF, but at ~12x P/E for a 15% ROE business, it feels like the poor prevailing circumstances are priced into the market's value of MVF's stock."


You talk about "limited demand", but the official stats on growth in the Assisted Reproductive Services (ARS) show that it is a sector that undergoes secular growth, based on demographic forces.

Now, there is some economically cyclicality around that structural growth path, and the revenues and earnings of both listed ARS players have been affected by the cyclical downturn in recent years.

But, in any economic sector which is growing structurally, periods of slowdown lead to pent-up demand, which at some stage translates into a cyclical recovery.

So, to answer your question, in my investment thesis for MVF, I am somewhat ambivalent as to when that recovery in demand occurs, except that I expect fully that - unless there has been some major sociological change of which I am unaware - it will at some stage.

And in the meantime, while I wait, I am getting paid a fully franked dividend at rate equivalent to between 5% and 6% of my invested capital.