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PGC - Paragon Care

Discussion in 'Stocks I-P' started by piggybank, Jan 29, 2015.

  1. piggybank

    piggybank

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    Paragon Care Limited (PGC) is a provider of integrated services to Australia's health and aged care markets. The Company supplies durable medical equipment to hospitals, medical centres and aged care facilities through its five businesses - AxisHealth, Iona Medical, Volker Australia, Rapini and GM Medical. It is presently trading at around a P/E of 14X, as well as having a fully franked dividend with a yield of 3%;):)

    This isn't a ramp up of the stock but one that came up on my scan yesterday and looked pretty interesting. Please DYOR


    150129 - PGCs.png
     
  2. The Falcon

    The Falcon

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    I once attended a meeting at Paragon Care, was offered a glass of water and after I had finished I noted not one, but two flies in the glass. I should have been concerned when the guy took a glass off a shelf in the boardroom. Two flies and I didn't get the business. I rate this stock avoid. :p:
     
  3. Value Hunter

    Value Hunter

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    Although the earnings growth seems impressive I would advise caution towards being long on the company.

    The first reason is because of the large number of acquisitions the company made over the past few years. For companies that make a lot of acquisitions, historically speaking the odds of stuffing things up over the long-term is high.

    The second reason for caution is if you look at the board of directors, the chairman Shane Tanner is also on the board (chairman) of Funtastic which has performed very poorly (in terms of earnings) over the past few years, and another director was formerly managing director of Pental PTL - formerly Symex corporation, which if you look at performance under his tenure was mediocre at best. One director Geoffrey Sam is sitting on 5 boards at the same time perhaps indicating that he lacks time to discharge his duties properly. The company has a managing director, the marketing manager also sits on the board, and also the chief operating officer is an alternate director (its generally considered bad corporate governance to have management sitting on the board).

    So in short the company makes too many acquisitions and the board of directors is a mess due to a conflict of interest due to management members being on the board (three), directors (two) who sit on boards (or previously did) of poorly performing companies, and one director who has arguably too many directorships and is merely a fee sucking professional director.

    Also the accounting is aggressive. Also the net tangible assets of the company is negative due to the huge amount of goodwill from acquisitions. This negative NTA contrasts to the roughly $38 million of interesting bearing debt in the last annual report. Also the company's capital management policies are highly cynical. The company keeps issuing more shares to raise acquisition capital whilst simultaneously increasing its dividend whilst operating a DRP. The dividend payments are just a marketing exercise to push up the share price to make equity raising cheaper. In my opinion in the future the company will continue to ask shareholders for more money (share issues/placements and DRP) over time than what they pay out in dividends.
     
    Last edited: Jan 6, 2017
  4. Boggo

    Boggo

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    I've been holding this for a while now, looks like we may be parting company tomorrow if it doesn't get back above 0.76.

    (weekly chart - click to expand)
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  5. basilio

    basilio

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    I think (hope..) Paragon will get it's act together in 2019 and become a go to company for medical supplies.
    I think it has been oversold and will bounce back in 2019.
     
  6. Miner

    Miner

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    Paragon management has a tough start today even with the encouraging market outlook the stock price got a whip. More than $1 M turnover with 10% slump, within market opened and trading halt removed. What was the expectation ? Royal Commission on Aged Care ?

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