HLSH: Sustainable Competitive Adv(3)
by: mirro7 (49/M/New York/New Jersey) AT YAHOO
Long-Term Sentiment: Strong Buy 08/21/03 12:49 pm
Msg: 100446 of 100491
HLSH: Sustainable Competitive Adv(3)
by: mirro7 (49/M/New York/New Jersey)
Long-Term Sentiment: Strong Buy 08/13/03 04:09 pm
Msg: 97314 of 100443
"When activities complement one another, rivals will get little benefit unless they successfully match the whole system. Such situations tend to promote a winner-take-all competition." It is my aim to invest in these winner-take-all companies… like Health South (Symbol: HLSH.PK) and I-Link (Symbol: ILNK.OB).
HLSH has sustainable competitive advantage:
Health South is in a unique competitive position with a business model that has focus in four complementing business activities in the high growth [due to aging population] industry. Health South is positioning itself as:
-- Operating network of approximately 1,800 facilities, including outpatient surgery, rehabilitation and diagnostic imaging centers, as well as rehabilitation hospitals and acute-care medical centers.
-- The only healthcare company operating facilities in all 50 states.
-- Operating healthcare facilities outside the United States in the United Kingdom, Australia, Puerto Rico, Canada and Saudi Arabia
-- Employer of approximately 51,000 medical and business professionals that are highly in demand
-- Working with more than 85,000 referring physicians nationwide.
-- Nation's Largest Provider of:
--Outpatient diagnostic services
--Outpatient surgical services
--Outpatient rehabilitation and physical therapy centers
--Inpatient rehabilitation services
Health South Financials speak for it self:
At the July 7, 2003 web cast the management presented the following facts for the benefit of employees, stockholder, debt holders and the physician partners…
-- Yearly Revenue projection of $4.1 billion… From June 2003 to July 2004
-- EBITDA of $650 million with $50 million contingency reserve that could come to the bottom line… for a total EBITDA of $700 million.
-- Free Cash Flow [net earnings available for debt reduction or further acquisitions] $328 million.
-- Shares outstanding less than 400 million.
-- Potential for margin improvements… 2%… that will bring another $80 million to the bottom line.
-- It had [as of 7/7] $345 million in cash and now [as of 8/12] it has $445 million in cash excluding the cash from sale of non-core assets… and is paying-off $117 million in outstanding interest payments. Health South managed to generate over $100 million cash in just about one month. That is significant accomplishment in such a short period of time.
-- Total debt is $3.2 billion
HLSH is positioning to be the leader in healthcare services sector catering to the aging America… undoubtedly the rapidly growing population of aging Americans is the target market for Health South.
HSLH is a $30 dollar stock, by the end of next year, when I believe all the “rocks” in its path have been crushed to pave the road to recovery.
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