After attending the TechKnow & having a detailed conversation with NB, we are in for a very exciting time with ALC and as such it is time to wipe the slate clean & start again.
We are at the beginning of their commercialisation strategy and we are already cash-flow positive - the significance of this is not to be underplayed.
Share Registry / Share Performance
Since re-listing, ALC has not been overly proactive on the PR side of things which is understandable as they had multiple challenges with their share registry, namely the stale NRR shareholders & also the participants in the 3.1c CR.
This 'overhang' was ripe for the picking as those old shareholders were well in the money & we have seen the impact of this registry rotation with the large volumes going through over the last 6 months & particularly of late when we make upwards moves.
This registry rotation has now come to a head & we have a pro-ALC register (i.e. no one which is looking to dump at any given opportunity with complete disregard for the price).
We are now at a point where we can rule a line in the sand & expect the SP to behave in an orderly (or more normal) fashion which will accurately represent the forward looking opportunities we have.
I understand this has been a large source of irritation to many LTers of ALC (myself included) and this is why I have dedicated a section of this post to address this issue in entirety.
Commercialisation
We are well advanced in the commercialisation strategy of our tech. We have gone through the beta-testing (paid tests) phase for the respective modules we have to offer & are receiving extremely positive feedback from all interested parties.
An interesting note for me was the fact that the installation / commissioning of the respective modules at the various hospitals is occurring in a fast, seamless & efficient manner. Rolling out such platforms can traditionally be a pain point and hence create risk in the process. However I am pleased to hear that these risks are being mitigated by the expertise shown along the way.
The 'sales process' only really began a couple of months ago when the management team had full confidence in their product offering and targeting approach. There have been a number of BDMs employed in the business who's sole target is to engage each & every one of the 800 hospitals in the country to offer the cutting edge solution that ALC has to offer. I also met their Melbourne based BDM yesterday & was impressed.
We have had 'little wins' but important wins to date. I reference the latest NT contract which was a nominal $-value, but extremely important as it highlights the fact that once hospitals purchase & commission one module, they are so impressed by the efficiency gains by way of time & cost that they want to purchase additional modules.
Gaining share of wallet across the suite of our products is going to be an exciting way to boost revenues & hence our reputation in the industry in a cost effective manner as the tech is 'doing the selling for us'.
The BDMs are targeted to see 15 new hospital opportunities per month and this, coupled with the significant level of inbound inquiries they are receiving should see the sales pipeline bursting at the seams in no time.
With NB's oversight, the commercialisation pathway for our tech is well & truly under control & hence the risks are also significantly mitigated.
Near-Term Catalysts
With such a robust product offering, best in class solution which is easily integrated and active, hungry sales force we have many near-term catalysts to look forward to.
I am expecting a constant stream of contract wins over the coming period as we ramp up that side of the business.
Digital Health & Health-Tech is an extremely exciting sector and we have the added advantage with our solution that hospitals all around the world are screaming for a solution which will reduce duplication, reduce preventable errors & give time back to the clinicians. ALC gives these hospitals a tick in each box.
I haven't even begun to go in to the regulatory tailwinds we already have in the US with their legislated position to upgrade all hospitals to EMR-7 & actually have in place punitive damages for those hospitals that haven't upgraded. (In layman's terms, this means the US government has passed a law that says all hospitals must have a robust electronic medical record solution in place or else they will receive less funding ... )
We can expect all other governments around the world to follow suit as they are all acutely aware that the number one risk to their budget positions going forward is the aging population with chronic & complex medical requirements. They need to legislate to muscle hospitals to find more efficient ways in doing things... step in ALC ... yet another monster tailwind.
Why are we so cheap?
Put simply, we are only attracting a mkt cap of 40m (note with 6m cash & being cash-flow positive) because of 2 primary reasons:
1 - The overhang I spoke about at the top of this post re: NRR & IPO shareholders
2 - Today, we lack share market awareness. Put simply, we are an unknown to 99.9% of investors out there - they simply have not heard about us.
The investor road show yesterday was the first since the commercialisation strategy has been in full swing. I could see many investors to the left & right of me gasping at the opportunity that ALC presents to not only their back pockets, but to the healthcare system.
The management team are now in full swing with respect to their PR campaign with 3 road shows this week & in a fortnight a round of road shows in NZ.
Conclusion
Simply put, we have an extremely compelling investment case. When the word spreads about ALC, the buyers will step up and these current levels will be history.
I am expecting an explosive fortnight with the increased investor focus to bring in a lot of new investors.
I am supremely confident that at the end of the quarter we will look back at these times & laugh at the SP as we will be well north of 10c..
GO ALC!!
ALC Price at posting:
6.7¢ Sentiment: Buy Disclosure: Held
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