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Advanced HEALTH

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Super Contributor
Anyone interested - model looks sound.. 70 year old CFO?
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Super Contributor
I like the story and have applied. With Discovery's change of heart the other medical aids will follow in time. Soon, the big groups will be doing something similar but Advanced have first mover status and the experience.
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Regular Contributor
I see fair value as between 140cps and 240cps, depending on some wide ranging assumptions. Basically, it is comfortably above the issue price of 100cps and thus making this private placement very attractive. Long-term, the business is in a defensive space with growth prospects, while being backed by strong management (who did this previously and quite successfully with Life). Basically, I like it. A lot.
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Valued Contributor
I not a fan of the model longer term but have applied for the IPO as I expect a pop on day one, will take quick profits ..
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Regular Contributor
Around what range would you expect the price to pop up?
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Super Contributor
@simon, @ what price of IPO did you apply for?
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Valued Contributor
they listing at 100c
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Valued Contributor
hoping for 10%-15% (110c-115c) on first trading day, will take very quick profits .. this is not a widows and orphans strategy, high risk that I don't get the pop instead it opens down 10%-15% or more ..
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Super Contributor
Depending on how much I get, I could just keep mine. I think there is a huge gap that they are planning to fill in this country with day hospitals.
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Valued Contributor
and if you want to know how badky an IPO can go, google candy crush IPO, and that not event he worst by a long way
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Valued Contributor
but if it truly a great idea, the big hospital players will simple squeeze them out, and they have legislative risk .. and they've managed to do exactly nothing for like 20 years and earnings growth seems to hinge around getting SA to break even more than anything ..
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Regular Contributor
Hospital cost-base higher due to 24hr overheads necessary to hand overnight beds. License also prevents them moving to that business model, while CompCom issues mean that even if hospitals apply for Day Hospital licenses, the Government highly unlikely to issue them. The real gatekeepers in the industry are the guys with the large wallets: the medical aids.... And Discovery is backing the industry, Bonitas and other talking about backing it. Far from hospitals squeezing them, I think hospitals high prices (and inability to lower them) makes this industry relatively attractive and might even boost its appeal.
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Super Contributor
@simon, excellent niche market. Private Hospital cost are way too high and at the lower end you are competing with the govt hospitals. Anyone who compete against our Govt, will surely win.
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Valued Contributor
unless government legislates against you (look at unsecured lending; ABL/JDG) .. an Harathke has alluded to this above, albeit from a different direction ..
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Super Contributor
if,if, if Simon. People generally spend less time in hospitals than 15 years ago. This market can only grow. If they can make this affordable they are the ones that will be pushing privatly owned day hospitals out of business and not the other way around. I'm sure people were sceptial about the Capitec's, Curro's etc of the world. If medical aid shema's get the smell of higer margins for them, then they will support this 100%. The rest will be history.
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Valued Contributor
sure, and disagreement is what makes a market .. I just stay away from sectors with legislative risk and I view health care as one of those sectors, we've seen it already with single exit prices .. remember this is about my long term death till us part portfolio .. I will hold in momentum (have APN and have had LHC) and this IPO is a trade not an investment .. that all said it may well be the next CPI, I still won't buy the sector
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Super Contributor
@simon, so you would not buy into this IPO for a long term investment but you were the one that bought Nasper at R1354.09 (all time high), why?
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Valued Contributor
actually R1,298 if I recall .. different strategies, that was a momentum buy .. I run six different strategies in the market (across trading and investing) ..
till death do us part, long term buy an hold
two momentum, midcap and top40
lazy, daily on Top40/ALSI, weekly on fini/resi/indi/midcap using ETFs
second tier/speculative (this is where this IPO fits as does AIP)
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Valued Contributor
importantly all six have very strict requirements in order to get into the portfolio (some mechanical TA but still strict) .. the requirements are never bent, not ever
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Super Contributor
Legislative risks in health care becoming, and in some countries already are a major concern for shareholders. People see their health being taken care of by governments as a human right. So if I can choose I would stick to another sector that are constantly punted as too risky because of legislation -ie cig and beer stocks, as the consumer here is a free choice customer. I dont (want to) know much about the stock in discussion - just a general view.
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