Q: Can you expand on the recent question on WELL. How good a company is it for a growth investor? It recently traded up to $5 but has back off to around $4.40. Is this a good point to buy? Where do you see it over the next 12 months? What are the catalysts that define company performance? It has been recommended by 5i, how strong is this conviction?
5i Research Answer:
Please also reference our recent report on the company. We would be comfortable buying. While the stock bounces around, it continues to execute on its M&A plan, and the fundamentals look fine. It is a slow industry for change, but WELL is making headway. Earnings, cash flow and acquisitions will be the main catalysts. It is quite cheap on valuation. We have a very high degree of conviction in management...but....it is a small company in an industry that can get bogged down with red tape. It also is fairly leveraged. Its acquisitions need to go well. But insiders are committed and there has been some insider buying this year.