Broker initiates today : 70% upside12 Oct 2015 13:36
Excellent news - Stifel have initiated with a 271p target:
Http://www.proactiveinvestors.co.uk/companies/news/116101/constellation-healthcare-s-rating-too-modest-says-stifel-116101.html
"Constellation Healthcare's rating too modest, says Stifel
10:18 12 Oct 2015
The stock would have to advance around 70% from today’s levels to match Stifel's valuation.
Broker Stifel has initiated coverage of Constellation Healthcare Technologies (LON:CHT) with a ‘buy’ rating and 271p a share price target.
The stock would have to advance around 70% from today’s levels to match that valuation.
Constellation describes itself as an RCM, or a revenue cycle management company.
Essentially, what it does for the nearly 6,000 doctors on its books is bill and collect monies owed by government, insurers and patients.
It also provides practice management and purchasing services.
Obamacare (or the Affordable Care Act to give it its proper name), has created huge upheaval for physicians, complicating the rules on payment while forcing down remuneration.
For the barely profitable small firms carrying out mission-critical billing operations, Obamacare adds a financially onerous level of bureaucracy that is often the final straw.
For Constellation, it has whipped up the perfect storm – or at the very least a great backdrop to consolidate a highly fragmented market.
Last month it made two acquisitions in a month at a total cost of US$32mln.
Meanwhile in March it completed its biggest deal to date with the purchase of New York-based Physicians Practice Plus for US$20mln.
Stifel’s Ken Rumph estimates that, including the contribution of the new businesses, Constellation trading on a very modest enterprise multiple of just 4.5 times and a price to earnings multiple of 10 times.
“Constellation is rolling up a large, growing, sticky and fragmented market for revenue cycle (billing) management in the USA,” said Stifel analyst Rumph. "