Posted on December 14, 2020 by Aaron Warwick
Today, Seeking Alpha published my most recent article on Protech Home Medical (PTQQF or PTQ.V). I have to confess: I was extremely bullish on PTQQF when I started the article, but doing a deeper dive on them as I was writing, I came away even more bullish. The reason for this is simple: PTQQF’s EV/EBITDA valuation multiple is low for its industry, all while the company is significantly growing revenue and margins. So, why does that cause me to be extra bullish?
Simple: there are two ways to “win” as a PTQQF shareholder. One way is that the EV/EBITDA valuation multiple rises to industry norms. In such a scenario, the PTQQF investor gains around 50% on that alone. The second way to win as a shareholder is that PTQQF’s valuation multiple remains low, but the company meets (or exceeds) its EOY 2021 annual revenue run rate target. In that scenario, revenue and EBITDA should rise about 75%, as explained in the article, and the shareholder still gains 75%. Now, if the two of those come together, and PTQQF hits their revenue/EBITDA targets AND the valuation multiple expands to be in-line with industry norms? Well, that’s what I call a grand slam!
In any case, the article I published on SA covers in more depth the points I noted in a previous Breakout Investor post. It also discusses the new appointment to the Board of Directors of an Independent Director, a major step towards PTQQF uplisting to Nasdaq or NYSE in early 2021. In short, I see little downside at today’s share price, and up to 150% upside over the next calendar year.
Disclosure: I am long PTQQF, but may buy or sell shares at any time.