What’s your current thoughts on Vhi? Valuation wise it currently seems pricey . But , the company recently completed a big offering at near today’s price. So, investors seem to want to pay up for the name. Recently Jason Donville named it as a top pick , with him spouting that it should be a $20 stock in a year. Is this realistic ? I remember when Donville was a small cap god on BNN 10 years ago; at one time he had a good reputation it seemed as a stock picker . He also mentioned that it is the next dsg. Big shoes to full. I guess question is does vhi really have the potential to change the healthcare software sector radically in the next few years ? Does it hold a product ahead of any competition? Is this a name that could be a huge winner in the long run ? I hold a smaller position currently. Wondering if it’s worth a shot adding to the band long term at this level ?
Thanks ,
Shane
Certainly VHI has strong potential. We don't like such comparisons to other companies, as every company and industry has different risks and opportunities. Mr. Donville is a solid manager who had a really bad 2022. But he was up more than 80% last year. VHI is expensive, certainly, on current metrics. But we note EPS is expected to more than triple this year (7c to 22c) and if it can continue with high growth the stock will likely continue to do very well. The healthcare sector can be slow to change, but revenue is growing fast and certainly it is getting traction. We think it likely has some competitive advantages but they need to be sustained and improved on to be a real success. Revenue growth will be the proof here, as it is difficult to ascertain advantages without third-party validation through sales. We can't comment on position sizes but would note we have a 2.8% position in our Model Growth Portfolio. We do continue to like it.