One of the fastest-growing quality stocks in an attractive industry? Providing software solutions for the healthcare sector is a very attractive business model. The end market is expected to grow by 16% (!) per year until 2030. A clear market leader in this? Equasens.
Rather than a "one size fits all" in terms of margins, it seems best to make comparisons with similar companies where possible, or at least similar industries.
Just went through this one, and it felt off, but then I realized Pieter didn't write this one, so that makes sense... Also, it's easy to comment on others, and my questions may be way off base. So take the following as you will
Starting in reverse with the end score:
15 points, averaged out at 7.5. If I put them in a calculator myself, I arrive at 7,96, or ~8. Compared to other company deep dives, that makes a difference at least to me on whether I even keep them on the radar or not.
Business model -> you know and understand what they do, yet like Vas says: what is the exact product (it's a group, and they have several products/services, recently for growth they are investing in an invoicing solution for their member pharmacies).
Is management capable: The current CEO is not there for 1 year, but for 2 already, and was deputy CEO for several years. But also, if they are really capable to you, then why only 8? Because the CEO is new still perhaps?
Balance sheet: nothing said of goodwill / assets (or even how you score it)
Capital Intensity <-> Capital Allocation: both same score yet one meets your thresholds and one doesn't... (sort of the same with profitability, it scores higher than capital allocation, despite not meeting the thresholds)
No stock-based compensation: they have a plan for the top 3 executives to get 15k stock, performance-based, since 2023... the founder has 23k. This 9 seems not warranted?
And no mention of all the acquisitions they made in 2023, which is something that usually warrants attention. In fact, that their net debt/FCF is still so low is very interesting. And the acquisitions they made, look very strategic instead of just keeping potential newcomers out of "their" market.
After all these comments, if I adjust values for myself, I ironically also still come to 7.5 out of 10 :D
Market Compounders would be interested in contributing an investment case.
We publish independent, business focused research on overlooked public companies. Each case examines how the company creates value, its competitive advantages, reinvestment opportunities, management, valuation, and the evidence that could break the thesis.
Kaspi.kz could be a natural starting point. It combines Kazakhstan’s dominant payments network, marketplace, and retail bank. The central question is whether the exceptional economics of its home ecosystem can travel to Turkey through Hepsiburada without weakening returns.
The publication has also covered Grab, Inter & Co, and NervGen Pharma, with the risks and opposing evidence kept visible rather than buried.
The goal would be serious research rather than a recommendation exchange or promotional mention. Existing work can be viewed at https://marketcompounders.com/
If outside investment cases are still open, Market Compounders would be glad to send a short proposal and source outline first.
Nice run down James! Thank you.
James is amazing!
Rather than a "one size fits all" in terms of margins, it seems best to make comparisons with similar companies where possible, or at least similar industries.
Fair point. But it's also good to have one framework to analyze business. Keeping it simple is something amazing. :)
Thanks, James. Well done!
James is amazing!
Just went through this one, and it felt off, but then I realized Pieter didn't write this one, so that makes sense... Also, it's easy to comment on others, and my questions may be way off base. So take the following as you will
Starting in reverse with the end score:
15 points, averaged out at 7.5. If I put them in a calculator myself, I arrive at 7,96, or ~8. Compared to other company deep dives, that makes a difference at least to me on whether I even keep them on the radar or not.
Business model -> you know and understand what they do, yet like Vas says: what is the exact product (it's a group, and they have several products/services, recently for growth they are investing in an invoicing solution for their member pharmacies).
Is management capable: The current CEO is not there for 1 year, but for 2 already, and was deputy CEO for several years. But also, if they are really capable to you, then why only 8? Because the CEO is new still perhaps?
Balance sheet: nothing said of goodwill / assets (or even how you score it)
Capital Intensity <-> Capital Allocation: both same score yet one meets your thresholds and one doesn't... (sort of the same with profitability, it scores higher than capital allocation, despite not meeting the thresholds)
No stock-based compensation: they have a plan for the top 3 executives to get 15k stock, performance-based, since 2023... the founder has 23k. This 9 seems not warranted?
https://equasens.com/wp-content/uploads/2023/08/URD_-_EQUASENS_2022_-_UK_202308291702.pdf section 5.2
... continued in comment, seems to break off here ...
And no mention of all the acquisitions they made in 2023, which is something that usually warrants attention. In fact, that their net debt/FCF is still so low is very interesting. And the acquisitions they made, look very strategic instead of just keeping potential newcomers out of "their" market.
After all these comments, if I adjust values for myself, I ironically also still come to 7.5 out of 10 :D
As the de historical pe ratio is much higher as of today why do you assume the future P/E ratio will be 17
I like to use a margin of safety. 17x is a fair PE for Equasens in the long term if you ask me.
Where in that analysis is the :
How are they actually making money??
What is the exact product and characteristics?
It's in point 1 of the investment case right? :)
Well point 1 is a generalisation. What does software solutions for medical professionals mean?
This Chart is hopelessly broken.
Can you please elaborate?
Have you looked at the chart? Should be pretty self explanatory. It’s broken.
Not buying the company :)
I’d hope not.
Market Compounders would be interested in contributing an investment case.
We publish independent, business focused research on overlooked public companies. Each case examines how the company creates value, its competitive advantages, reinvestment opportunities, management, valuation, and the evidence that could break the thesis.
Kaspi.kz could be a natural starting point. It combines Kazakhstan’s dominant payments network, marketplace, and retail bank. The central question is whether the exceptional economics of its home ecosystem can travel to Turkey through Hepsiburada without weakening returns.
The publication has also covered Grab, Inter & Co, and NervGen Pharma, with the risks and opposing evidence kept visible rather than buried.
The goal would be serious research rather than a recommendation exchange or promotional mention. Existing work can be viewed at https://marketcompounders.com/
If outside investment cases are still open, Market Compounders would be glad to send a short proposal and source outline first.
Any updated view on the stock given the recent drop?