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Good article here on Liberum's initiation of coverage:
"Liberum initiates coverage on Medica at 'buy'
Iain Gilbert
25 Feb, 2021 13:37 25 Feb, 2021 13:37
Analysts at Liberum initiated coverage on teleradiology firm Medica on Thursday at 'buy', pointing to faster earnings per share growth, higher earnings quality and underestimated optionality.
Liberum said Medica's new management team had made "the right investments" to take advantage of surging end-market demand and "incredibly tight supply", a move that the analysts believe will allow it to deliver a 20% organic EPS compound annual growth rate to 2025.
Furthermore, Liberum expects Medica to use its strong balance sheet for EPS accretive mergers and acquisitions that will diversify the business into new services and geographies.
Liberum also acknowledged Medica's addition of new chief executive and chief financial officers over the last two years, highlighting the team's "ambitious plans" to optimise growth in the firm's core markets through recent investments that were now bearing fruit.
"We believe that Medica is set to deliver some of the fastest EPS growth in the UK healthcare services sector whilst M&A provides significant optionality. Yet it trades at a c.45% discount to peers," said Liberum.
"We expect this valuation gap to close over the next 12-18 months with earnings delivery and further M&A. We, therefore, initiate with a BUY rating and a £2.00 TP, implying 71% upside. Medica is now our top pick in UK SMID."
Liberum have this morning initiated coverage on MGP with a huge 66 page report, saying Buy with a 200p target.....
https://www.thisismoney.co.uk/money/investing/article-9262741/
Hi LazySundays,
If you have a look through the recent annual reports you will see Medica is working on integrating AI within their practice. They have partnerships with AI companies. At present the consensus is, as you as say, AI will help streamline and manage workloads. A large part of this is the technology but also the need to have a human being take responsibility. So the AI complete takeover might be further away that we think. Medica also covers a lot of the more complex scans (usually recognised as "routine").
The main drivers for revenue - increased emphasis on imaging, along with increased disparity between radiologists and images - remain. It's a case of AI making medica more profitable through efficiencies versus AI making medica less profitable through reduced demand. I'm in favour of the latter view (for now). I think they are forward-looking and will be making efforts to assess how to future proof their business (they spend more time than us thinking about it). The recent acquisition includes a foray into ophthalmology. They have a good track record of returning cash to shareholders with dividends, so even in a doomsday scenario it might be more of a case of reasonable cash being returned to shareholders rather than capital loss.
"As we outlined in 2019 we believe the short to medium term future for AI in radiology can deliver two main benefits: workflow enhancement and clinical decision support. The accuracy of tools in identifying specific clinical presentations, or the presence/absence of a specific disease is encouraging; however, no single tool or combination of tools is close to being able to provide a full clinical report, at least in the areas of radiology where Medica currently operates. A radiologist evaluates a wide array of data, including reason for referral, clinical history and all of the image data in this wider context
for all possible significant findings, not just a handful of specific findings. For example, algorithms now have similar accuracy to radiologists in finding lung nodules on a CT scan, but they are unable to accurately assess a multitude of other structures such as lymph nodes. To ensure the appropriate clinical pathway for the patient it is essential that the all elements of the scan are reported."
Hello everyone.
I’m not invested here but I am a reporting radiographer and have many radiologist colleagues who work for medica.
I am perhaps overthinking things from my own personal point of view BUT Artificial Intelligence is all around us. And image interpretation AI is probably more advanced than many believe.
Lots of research peer reviewed articles state thing like it won’t replace radiologist/ radiographers but streamline workflows and elimate normals so that radiologist have more times on abnormal.
However as large chunk of medica work is extras which departments can’t report in a timely manner I wonder what affect that will have on medica revenue and work load. Are there any knowledgable shareholders who can tell me are medica prepared if and ultimately WHEN AI has a bigger play.
Many thanks
Lazy
Very good all things considered. Performed well and strong growth potential in 2021, onward and upwards. Will be taking advantage of dip, only retail investors will be selling. IMO DYOR
Have bought dx (pre covid( and since covid Lgen jlp tnd rch twd so 6 buys with no sells , so more of a balancing of holdings , probably need to sell one or 2 others as well, to keep up with the news feeds
Agree. There will also be pent-up demand.
What made you sell? I'm interest to hear a different perspective.
My rationale:
I've added more during dips. I think the acquisition is good and allows them to move Ireland (maybe enabling faster EU growth) but also includes a few different services. Overall the business is well run with dividends, and strong balance sheet. The revenue drivers, which all result in an increasing disparity between radiological demands and radiologist supply, are still there.
I think Medica share price reflected eventual UK domination, something a la Rightmove, but sitting at (last time I checked) 50% of UK trusts with the new Ireland acquisitions, means all that UK growth is still available at a minimum. I think they might be able to manage any margin pressure through higher volumes and additional services.
But I have felt inpatient with the share price at times.
Sold this lunchtime for a loss , held for a couple of years ,moving on
yuk
#skinoutofthegame
retest 100-110?
flipping fun
back to 1450 freebies
back to future soon
This part caught my eye; "Significant potential for growth in revenue and profit from new contract opportunities in the short to medium term".
Gresham House building their stake again, now at 10.3%
with v high current valuation metrics
===> pretty decent gamble this falls below £1 now imv
tp for bounce 85-90p
Sales numbers, adjusted for covid, were still strong. Company paying a dividend showing it values shareholders and is also financially healthy. There will be a backlog of work plus return to additional work will lead to increased revenues given time.
Medica's position as market leader has many growth drivers most notably: not enough radiologists being trained, and the continued increases in volume and reliance on imaging within healthcare (with many drivers of this including reduced cost of imaging and also healthcare guidelines stipulating imaging as part of diagnostic processes). Ultimately this means the teleradiology gap that Medica operates in is growing, and Medica (as the UK market leader) is best placed to capitalise on filling this growing gap.
Yes Gresham House building their stake:
in @ 6.17% May 22nd
Increased to 7.23% July 16th
Increased to 8.98% Oct 5th
Increased to 9.88% Oct 15th
Also Aberforth in @ 5.87% Sept 8th.
gresham house is showing faith and increasing holding
tempted to buy back in, but still waiting...
perhaps a retest of £1 level?
Working in the health sector i know how massive the well publicised elective backlog is and that enormous efforts are underway to start clearing it. IMHO Medica will be right on the receiving end of this so I expect 2021 to be a record year. Hence I have started to invest heavily here as see an easy 50% upturn in SP within the next 12 months.
what should we expect form the update on monday- sp been retracing?
well run company with all the demand drivers still present and growing in magnitude. any dips I look to continue to build my holding
140.xx was sweet...
would buy back sub 130p...probably