Patient Home Monitoring is still undervalued, says Mackie

Patient Home Monitoring’s (Patient Home Monitoring Stock Quote, Chart, News: TSXV:PHM) new COO and Mackie Research Capital analyst Russell Stanley have something in common: they both think the company’s stock is undervalued.

Yesterday, Patient Home Monitoring announced it had promoted Greg Crawford to the position of chief operating officer. Crawford sold his company Patient-Aids Inc. to Patient Home Monitoring last year. The company noted he has elected to the remaining $11.4-million owed to him from the sale in shares instead of cash.

“Greg will make an excellent addition to the executive management team with his background, expertise and based on his execution over the last six months,” said CEO Casey Hoyt. “Greg brings substantial operating and M&A experience to his role as PHM’s chief operating officer. A hands-on problem solver, Greg has demonstrated significant skill at growing HME businesses both organically and by acquisition.

Stanley says Crawford is likely seeing the same thing he does: that PHM’s current share price undervalues it in comparison to its comparables, especially in light of its strong cash flow performance.

“We are not surprised by Mr. Crawford’s appointment,” says the analyst. “More importantly, we view his agreement to take stock (instead of cash) positively, as it demonstrates his confidence in PHM’s share price potential. Post-transaction, we estimate that Mr. Crawford would own 36.2 million shares, representing 10% of the basic shares outstanding (including the 33.8 million shares that would be issued). This would make Mr. Crawford the Company’s largest single shareholder. The Company’s CEO and President, Messrs. Casey Hoyt and Mike Moore, would each own 5% of the basic SO.”

In a research update to clients today, Stanley maintained his “Buy” rating and one-year price target of $0.50 on Patient Home Monitoring, implying a return of 96 per cent at the time of publication.