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M7T - Mach7 Technology

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  • M7T - Mach7 Technology

    For those at the Fatties get together last night, you will know that this was one of my hot tips for 2018. Sorry the meeting wasnt held earlier, because the company put out its 4C today and the stock went up 34% :-)
    But better late than never as they say, and this one seems to have really turned the corner. Building a US business, cashflow +ve, and expecting to be EBITDA +ve this year. The chart looks great, and the volume today makes this a genuine breakout for the technical analysts amongst you.
    For those of you with long memories, it used to be the old 3DM, but it merged with Mach7 a few years after the IPO, and the Mach7 software business is now its principle operation.
    Liquidity on the sell side is currently ridiculous, making this hard to get into now, but at the same time, the lack of sell side liquidity is what will drive that share price up.
    Don't drink and buy shares in a downtrend, you bloody idiot!

  • #2
    Got any outlooks on growth rates, future EBITDA, cashflows etc?

    Comment


    • #3
      Bought in to this today... one parcel at A$0.31 with a total cost incurring more than minimum brokerage.
      One of my more speculative buys given my particular risk appetite... which, for what it's worth is to go in large based upon at least a few years of past performance with proven consistent growth.

      The upsides for me in addition to those KW mentions above:
      • Mach7's products and services are badly needed within the healthcare sector. M7T believe there is "enormous commercial potential" for what they do and I think they're right.
      • I like M7T's reporting style... seems to be no-nonsense without the bull**** bingo.
      • The KPI structure for issuing performance based shares appears reasonable to me (assuming the goal posts aren't too far away - a non-achievable target = no target).
      • An ongoing expanding revenue stream from post-sale support and maintenance services. This looks encouraging
      • The recent impairment of goodwill related to the acquisition of the Mach7 group feels like a very prudent measure to me... sounds like a Board who might be realistic
      • Also looks like they are monitoring and controlling their expenses well.
      • The non-capitalisation of their past product development costs bodes well for the future assuming they reach critical mass (..nearly there imho)
      On the downside:
      • As mentioned above, a lack of history available for analysis and hence a difficult company to value at the minute.
      • To compound this, last full-year result (to 30-June-2017) compares itself to an unaudited previous corresponding period.
      • Mike Jackman appears to have the credentials but he is as-yet unproven within Mach7 due to his recent arrival.
      • Exiting the 3D model market, although the right decision by the looks, does mean the company's risk profile is now higher (by being exposed to essentially a single market now). This will amplify whatever the company's results may be looking forward.
      • Positive EBITDA yet to be achieved but this is looking promising
      • As KW mentions, ASX trading liquidity is poor

      On the whole, looks like there is very good upside potential and not much on the downside. In any event I have put a bit of money where my mouth is.
      Last edited by Vaygor1; 19-01-18, 09:57 AM. Reason: Fixed a typo.

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      • #4
        I like the look of this company - thanks KW and Vaygor - ( terrible reasoning eh !) and grabbed a few today

        Also ( for once ) there are a few useful posts on HC if you go looking - such as this - posted on 16/1

        What to like about M7T?
        • Under the Radar Stock.
        • This $31m mcap stock (at 24c) is little known compared to Promedicus (PME) which has its Visage imaging platform that makes imaging management and access more manageable, faster and flexible. PME is already a $880m mcap business. Essentially both businesses offer great value propositions for the management of imaging data for global health enterprises
        • Mach7 has a great value proposition to health enterprises to improve and optimise patient care outcomes by resolving the lack of interoperability issue of current legacy health systems and provide a cloud based archiving system which reduces healthcare management costs. Mach7 Enterprise Imaging Platform offers best-in-class software for improved patient outcomes providing the following value propositions (i) innovative platform with intuitive point and click interface and real time monitoring dashboard (ii) intelligently brings together multiple image formats into a cohesive workflow (iii) scalable with customer’s growth (iv) cloud medical image archiving system reduces IT expenses for customers
        • A proven business foundation evidenced by
        1. Its US and global deployment across >450 sites in >52 blue chip health enterprises across 11 countries including eminent health institutions such as Massachusetts General Hospital, University of Virginia Health System, University of Vermont Medical Centre, Qatar Health and Singapore General Hospital amongst others
        2. 100% owned IP enterprise imaging technology with great functionalities
        3. Already handling >1 billion images
        4. Global Recognition received for being an innovative leader in delivering advanced clinical imaging and data services for health enterprises including “No 1 Leader US Healthcare Provider VNA/AICA Unstructured Data Platforms for Integrated Care” by IDC Marketscape 2016 and “Asia Pacific Medical Imaging Informatics Company of the Year” by Frost & Sullivan 2015
        5. Secured contract wins generating strong double digits year-on-year revenue growth
        • A large global addressable market of US$3.8 billion by 2020 with multiple market segments including VNA (virtual neutral archive), Image exchange, Department and Enterprise PACS, ECM (Enterprise Content management) and Enterprise Viewers within the healthcare sector
        • New Management led by Mike Jackman previously with GE Healthcare and Kodak
        • M7T received institutional support in the form of Oceania Capital Partners recently in Nov17 with an 8.8% equity stake acquired at 17.5c
        • Target to achieve EBITDA positive outcome in FY18 which upon realization would provide catalyst for an sp re-rate outcome. M7T’s expense to revenue ratio has been on a year-on-year decline.
        • FY17 Annual Revenue of A$10.3m growing at 76% and between 2013 to 2017, revenue grew at CAGR rate of 37% driven by customer wins in US market. Large sales pipeline of USD66m in Aug17. Recurring revenue becoming an increasing proportion as it moves into a SaaS model. M7T has cash of circa $2m but currently has a negative EBITDA of $4.2m.
        • M7T has primarily focus much of its sales and marketing in the US which is the largest market but if its forward efforts via indirect channels in Europe gains traction, this would be positive for shareholder returns.
        • M7T has very limited supply shares on sale (circa $120k out on sale) and if demand on a day surprises as the market becomes awaken to this stock's prospects, price could easily gap up.
        Assuming that M7T can continue growing its annual revenue by 40%, FY18 could see annual revenues of circa A$14.5m which provides a mcap/revenue ratio of a mere 2.15x . A reasonable mcap/revenue ratio of 3.5x should now provide M7T a market cap of $50.75m or a more reasonable valuation price of 39c with an upside potential of 62.5%.

        If I may compare M7T against Big Tin Can (BTH) (which has circa $13m annual revenue and similarly yet to be profitable) which I started coverage in Oct17 when it was 20c (mcap $35m), BTH now has a mcap of $82m and share similar business fundamentals as M7T. So if the market begins to recognize M7T’s fundamentals the same way it does with BTH now, $80m mcap could well be a benchmark target for the medium term especially if management secures more contract wins. A market cap of $80m equates to a 60c share price representing a 2.5x bagger. However, such an outcome IMO becomes more likely when M7T achieves EBITDA breakeven.
        Last edited by Crackity; 19-01-18, 09:44 PM. Reason: buyed some today

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        • #5
          "Hello Trend Channel, my old friend..."

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          • #6
            1/2 yearly result out.
            EBITDA not up to expectations.
            Cashflow still on the good side.
            Increase in sales not up to expectations due to large 1-off's from last financial year not within this financial year however general trend appears healthy.
            SP hammered as to be expected by the market when expectations are not met (coupled with recent ASX tech-stock speed-wobbles due to the likes of GSW and BIG)
            The language used in their announcements and the transparency I perceive in their explanations leaves me with a good level of comfort (i.e. my bullsh!t detector hasn't gone off yet).
            Possibly time to top up. Will apply a bit of TA here.
            Last edited by Vaygor1; 27-02-18, 12:31 PM.

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            • #7
              I've sold it. The market is very unforgiving at the moment, and volatile. I'm erring on the side of caution - anything that doesnt live up to expectations gets cut, and I'm slowly moving to cash. Still like the company though, so if the markets recover and the stock's momentum returns, I'll buy it back.
              Don't drink and buy shares in a downtrend, you bloody idiot!

              Comment


              • #8
                KW.


                Must be time to update this thread - been looking good for the last few months....I’m sure you got back in around late April this year....

                Last edited by Crackity; 14-06-19, 05:54 PM.

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                • #9
                  Now funny you should say that, as yes, I did get back in (May) :-)
                  There are a few companies that boomed and bust a few years ago, but are having a bit of a revival. DUB and NAN are other ones (also onboard for the second time).
                  Don't drink and buy shares in a downtrend, you bloody idiot!

                  Comment


                  • #10
                    As per my typical fashion, since my first M7T post above in Jan-2018, I've been a buy, top-up-now-and-again, never-sell accumulator of this share. Happy to see my initial investment up over 120% now. It will be interesting to see how it goes from here but the news this morning certainly will help to keep the interest in this company alive. Plenty of upside potential yet when comparing it to other ASX companies operating in a similar sector.

                    I wouldn't have put M7T in the boom and bust category. My perception is M7T's been steady as she goes. I think the market just got too far ahead of itself too early (in Oct-2016) on this share, but not anymore
                    Last edited by Vaygor1; 10-07-19, 02:45 AM.

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                    • #11
                      Well, it was a mini boom and bust, as it drifted back to 16c. Second time's the charm right? Interesting to note the difference in volume between its previous move and now. Shows what a difference big money flow can make. M7T is being picked up by funds now, hence the volumes are rising. Sometimes hot tips at a share trading meeting are just not enough to get the stock volumes required


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                      Don't drink and buy shares in a downtrend, you bloody idiot!

                      Comment


                      • #12
                        W
                        Originally posted by KW. View Post
                        Well, it was a mini boom and bust, as it drifted back to 16c. Second time's the charm right? Interesting to note the difference in volume between its previous move and now. Shows what a difference big money flow can make. M7T is being picked up by funds now, hence the volumes are rising. Sometimes hot tips at a share trading meeting are just not enough to get the stock volumes required


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                        livewire during June mentioned them a couple of times - here’s one excerpt ( June 28)

                        Henry Jennings: There's one stock I like, which is Mach7 Technology. M7T is the code. It always gets complicated when you have numbers coming into codes, but these guys are providing digital data management for hospitals. This is something that's becoming more and more necessary for hospitals because they need to have all those records to be able to be accessed by doctors at all times. They've been picking up some good contracts recently. They're only a tiddler. They're only $70-million market cap, but they have been doing quite well recently, picking up some good contracts, and they're starting to make some good inroads.

                        I think this is one to watch as we move towards a world where a doctor can pick up an iPad and that's what they have all the records there in high definition, and these guys should be at the forefront of that.

                        nice chart eh! Market cap today $102 million....
                        Last edited by Crackity; 10-07-19, 01:19 PM.

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                        • #13
                          Was tipped by Morgans too, along with VHT PME and IMX as stocks to watch.
                          Don't drink and buy shares in a downtrend, you bloody idiot!

                          Comment

                          HLG

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