Q: With CRH down drastically two days in a row on two short reports, management has not made a response which leads me to believe these reports are probably true which will result in a poor earnings report. Shouldn't they have responded. Your opinion please. Thanks
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Q: Hi Peter and Team,
Could you please comment below The Motley Fool's analysis about CRH.
"CRH made three acquisitions in 2016 for controlling interests of anesthesia companies with two of the acquisitions for 51% of the targets, and the third acquisition for approximately two-thirds of the business.
Because CRH now owns more than 50% of these companies, it is able to include 100% of the revenues and earnings from these firms on its balance sheet, boosting total earnings substantially while distributing only approximately half of the acquired value to shareholders.
On the bottom of the financial statements, we can see that net income “attributable to shareholders” was $10.6 million in 2016 and net income “attributable to non-controlling interests” was $5.5 million, meaning more than a third of the net income produced by CRH in 2016 is not attributable to shareholders of the company.
It is important to differentiate the two; looking at the financial statements from a high-level perspective, the numbers may seem impressive, and the growth rates often stated on press releases or in the media may make investors wonder why they didn’t pick this “growth gem;” however, the numbers used are clearly artificially inflated by more than one-third, and the overall indebtedness attributable to shareholders is more than one-third higher.
Shareholders who are not careful to take note of the adjustments may be disappointed when they understand that their overall equity as a percentage of the total company is actually shrinking.
The percentage of net income attributable to shareholders has been decreasing at an alarming rate due to the manner in which CRH is completing its acquisitions. As of Q4 2016, over 45% of the company’s quarterly net income was not attributable to shareholders, meaning in 2017 investors can expect to cut most of the numbers shown on the financial statements in half for the sake of accuracy."
Thanks
Could you please comment below The Motley Fool's analysis about CRH.
"CRH made three acquisitions in 2016 for controlling interests of anesthesia companies with two of the acquisitions for 51% of the targets, and the third acquisition for approximately two-thirds of the business.
Because CRH now owns more than 50% of these companies, it is able to include 100% of the revenues and earnings from these firms on its balance sheet, boosting total earnings substantially while distributing only approximately half of the acquired value to shareholders.
On the bottom of the financial statements, we can see that net income “attributable to shareholders” was $10.6 million in 2016 and net income “attributable to non-controlling interests” was $5.5 million, meaning more than a third of the net income produced by CRH in 2016 is not attributable to shareholders of the company.
It is important to differentiate the two; looking at the financial statements from a high-level perspective, the numbers may seem impressive, and the growth rates often stated on press releases or in the media may make investors wonder why they didn’t pick this “growth gem;” however, the numbers used are clearly artificially inflated by more than one-third, and the overall indebtedness attributable to shareholders is more than one-third higher.
Shareholders who are not careful to take note of the adjustments may be disappointed when they understand that their overall equity as a percentage of the total company is actually shrinking.
The percentage of net income attributable to shareholders has been decreasing at an alarming rate due to the manner in which CRH is completing its acquisitions. As of Q4 2016, over 45% of the company’s quarterly net income was not attributable to shareholders, meaning in 2017 investors can expect to cut most of the numbers shown on the financial statements in half for the sake of accuracy."
Thanks
Q: How to catch a falling knife and when do you know it's hit the floor?
In your opinion, considering all the media, short attack pirates, and the massive volatility that have come to life so quickly. How would you play picking up CRH medical? I see technical levels at 7.99 for different measures as a resistance level. Or perhaps it would be prudent to spend time on the sidelines and watch this one. Or would it be best to watch the moves of institution buying as a sign of confidence for those who have done their homework vs. stop losses begetting further selling? I see this company as having a lot cleaner financials, so I don't feel too worried taking a small position at $8.00.
In your opinion, considering all the media, short attack pirates, and the massive volatility that have come to life so quickly. How would you play picking up CRH medical? I see technical levels at 7.99 for different measures as a resistance level. Or perhaps it would be prudent to spend time on the sidelines and watch this one. Or would it be best to watch the moves of institution buying as a sign of confidence for those who have done their homework vs. stop losses begetting further selling? I see this company as having a lot cleaner financials, so I don't feel too worried taking a small position at $8.00.
Q: I realize you guys have to be diplomatic, but the rationale that the shorts (different people in each case, by the way) were right on other stocks so they are probably right again is laughable. And it should be pointed out that just a month ago Motley Fool (not exactly the cream of the investment crop anyway) issued a very positive report on CRH.
http://www.fool.ca/2017/03/22/investors-forget-valeant-pharmaceuticals-intl-inc-check-out-crh-medical-corp-instead/
Thanks,
Alex
http://www.fool.ca/2017/03/22/investors-forget-valeant-pharmaceuticals-intl-inc-check-out-crh-medical-corp-instead/
Thanks,
Alex
Q: I'm dowm 18%. Should I fold my hand on this?
Q: I know you like both of these companies, but which one would be your preference for a 2% position? I currently hold a 2% weighting in IPL.
Q: April 24/17 ? Asked by david:
Shorts right on cxr, vrx, any big loser:
All the above would have closed below their 200 day moving average at some point. Selling at that point would have eliminated any big loser.
Shorts right on cxr, vrx, any big loser:
All the above would have closed below their 200 day moving average at some point. Selling at that point would have eliminated any big loser.
Q: Can you elaborate on the nature of the continued selling. Are there any institutional blocks or is still primarily retail in your estimation? Thx
Q: As these 2 Brookfield stocks are closely related, which one would you prefer at this time. Returns for the last year seems to be quite a bit higher for BRF.PR.A. Tnx
Q: Hi,
Just came upon this article from Motley Fool, any merits to this comparison between CRH and VRX?
http://www.fool.ca/2017/04/24/is-crh-medical-corp-a-valeant-pharmaceuticals-intl-inc-2-0/
Just came upon this article from Motley Fool, any merits to this comparison between CRH and VRX?
http://www.fool.ca/2017/04/24/is-crh-medical-corp-a-valeant-pharmaceuticals-intl-inc-2-0/
Q: the shorts were right on valeant, right on concordia, right on home capital, right on dh corp, maybe they are also right on crh medical, by the price action it certainly seems like they are right, just maybe you have this one wrong. please comment. dave
Q: Hi, this company had a rough third quarter and it's share price has since consolidated to what seems to me like a reasonable level. Given it's future potential for VR , it's new and unique home theater product/content offering due to launch soon, one could see some upside potential in this stock. Considering it is not a profitable company and the stock is in a downtrend, you recommend starting a position , or wait after earning release in June ? Thanks !
Q: Can you give an update on D-box, they seem to be on a downward spiral. How much of their business is reliant on movie goers, and are their industrial applications not making any advances( no news). Also what was the reason for their big drop in Feb. of this year and what is a reasonable time frame to wait for some upward growth. Thank you.
Q: Peter and Team: This is my first question since joining this august group, as I am still in learning mode and want to make sure my questions add value. However, I think this issue is important and I am truly perplexed. I note that yesterday, 80% of CRHM volume traded were short sales and on above average volume (source: shortvolume.com), which was highly unusual, and the price closes even. Then, the very next day on much greater volume still, the price plummets. Doesn't this strike one as extremely odd, temporally speaking, and especially, as you point out, that most of the trading seemed to be retail? What could be the possible explanations for this? I would really like to understand this one for future reference. On the surface, it would suggest to me that some folks must have information that others don't (earnings leak?), because I find it difficult to believe that the short report referred to earlier explains it all. Any and all thoughts would be most appreciated.
Q: Hello Peter, Ryan et al
I spoke with Kettina Cordero, IR Director for CRH regarding the volatility which she attributes to a letter from a hedge fund manage to his subscribers, however, my thinking was related to the release next week of "Unaudited" statements. She indicated that the CRH fundamentals have not changed and that it is fairly common that unaudited quarterly financials are not audited. Any thoughts?
Thank you .... Marty
I spoke with Kettina Cordero, IR Director for CRH regarding the volatility which she attributes to a letter from a hedge fund manage to his subscribers, however, my thinking was related to the release next week of "Unaudited" statements. She indicated that the CRH fundamentals have not changed and that it is fairly common that unaudited quarterly financials are not audited. Any thoughts?
Thank you .... Marty
Q: What are the expectations for earnings and sales for the Q ending 03/31? I understand they report after hours on April 26 with a conference call the following day
Q: CRH is basically a core holding for me I guess. It climbed to 8% of my total portfolio but is now 3.9% which I can handle. I was wondering however if this might provide a short term trading opportunity on a core position. The question is when to buy, before or after they report.
Thank You again
Clarence
Thank You again
Clarence
Q: Hi 5i,
Just a comment: I’m not sure exactly what to conclude from CRH’s price move today. We have a one-day share price decline of over 18% on something like 6x average volume (possibly more because I don’t think my broker’s site picks up all volume), which appears to have been motivated by a rumor that an un-named hedge fund manager has circulated a negative report and short recommendation on the company. At the time of my writing, trading for Friday is closed and I still can’t find any mention of who supposedly issued this negative report and recommendation, let alone a copy (or even a second-hand description) of the report, to begin informing myself and critically evaluate. Nonetheless, based on the reported size of the individual sales, the initial appearance is that today’s sell-off was fueled significantly by retail investors, who would likely be in no better position to evaluate the situation than I am, rather than by large block sales from institutional investors. Of course with a stock like CRH having tripled fairly quickly from the $4 level, it was ripe to be sold. Anyone holding over that period could hedge out by selling half their position in the $10-$12 range, crystallizing a profit, and be left with only winnings on the table to play with. Investor sentiment may be influenced by fundamentally unrelated confidence issues, such as events and trading around HCG over the past few days, among other items. And there may be many holders of CRH who still can’t say exactly what separates it from being another PHM. But without even any allegations to look at, shareholders are exhibiting a “sell on the rumor of a rumor” mentality, and CRH is worth nearly $163,000,000 CAD less (by market cap) than it was at this time yesterday.
Meanwhile, SHOP was attacked by a negative report with a “Zacks Rank 5 – Strong Sell” rating slapped on it at the end of March, supposedly based on valuation getting too far ahead of fundamentals. Shortly thereafter the stock plunged from above $97 CAD to below $90 CAD in two days. Almost 3 weeks later, with no specific fundamental news in the interim, SHOP closed today above $103 CAD. Zacks Rank today? “3 – Hold” (https://www.zacks.com/stock/quote/SHOP ).
Yeesh!
Publish only if you want to.
Just a comment: I’m not sure exactly what to conclude from CRH’s price move today. We have a one-day share price decline of over 18% on something like 6x average volume (possibly more because I don’t think my broker’s site picks up all volume), which appears to have been motivated by a rumor that an un-named hedge fund manager has circulated a negative report and short recommendation on the company. At the time of my writing, trading for Friday is closed and I still can’t find any mention of who supposedly issued this negative report and recommendation, let alone a copy (or even a second-hand description) of the report, to begin informing myself and critically evaluate. Nonetheless, based on the reported size of the individual sales, the initial appearance is that today’s sell-off was fueled significantly by retail investors, who would likely be in no better position to evaluate the situation than I am, rather than by large block sales from institutional investors. Of course with a stock like CRH having tripled fairly quickly from the $4 level, it was ripe to be sold. Anyone holding over that period could hedge out by selling half their position in the $10-$12 range, crystallizing a profit, and be left with only winnings on the table to play with. Investor sentiment may be influenced by fundamentally unrelated confidence issues, such as events and trading around HCG over the past few days, among other items. And there may be many holders of CRH who still can’t say exactly what separates it from being another PHM. But without even any allegations to look at, shareholders are exhibiting a “sell on the rumor of a rumor” mentality, and CRH is worth nearly $163,000,000 CAD less (by market cap) than it was at this time yesterday.
Meanwhile, SHOP was attacked by a negative report with a “Zacks Rank 5 – Strong Sell” rating slapped on it at the end of March, supposedly based on valuation getting too far ahead of fundamentals. Shortly thereafter the stock plunged from above $97 CAD to below $90 CAD in two days. Almost 3 weeks later, with no specific fundamental news in the interim, SHOP closed today above $103 CAD. Zacks Rank today? “3 – Hold” (https://www.zacks.com/stock/quote/SHOP ).
Yeesh!
Publish only if you want to.
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Q: totally agree with Jim your services surpass any other
your advice and analysis are more than appreciated
keep the super good work
thanks for your insight and knowledge
your advice and analysis are more than appreciated
keep the super good work
thanks for your insight and knowledge