I was hoping not many people would have got the chance to read that post before I requested it to be removed. In hindsight, I should have worded that post more carefully as it could come across as asking Dr Michael Buist to explain himself to us on why he has sold down his position. I sincerely hope that
@Littletom25 did not interpret it that way but, if so, my sincere apologies.
We all have our own reasons to buy and/or sell and should therefore never be obliged to explain our decisions, particularly in a public forum.
To a large extent, Alcidion is a classic case of double-edged sword.
High level of insider ownership which is all good as it provides a level of stickiness. But when the selling starts, it can go on for months and even years - especially when buyers do not step up.
When I first bought into Alcidion, I recognised this risk which was subsequently somewhat increased after the acquisition of MKM Health because some insiders are in a mature age group where retirement is near. It is clear that some insiders have been and perhaps are continuing to sell down their position.
However, I can't really fault them given the time, money, effort and hard work they have all put in over the years to build Alcidion (and MKM Health). If I am close to retirement, I would also sell some shares to travel around the world (but obviously not when there is a pandemic).
Regardless of the sell down, I have been continuing been adding to my position because I believe Alcidion plays to three of the biggest healthcare theme in 2021, namely:
- Hospital without walls - remote monitoring
- Enterprise sharing - digitalisation of records enabling sharing of information across networks and hospitals
- Artificial Intelligence - increased efficiency and effectiveness of healthcare delivery
Using the five Ps approach, I have sought to crystallise my thoughts process of why I am heavily invested in Alcidion:
Problem - what are the problems that Alcidion is trying to solve?My thoughts: limited hospital capacity, rising costs in delivery of healthcare in an environment of rising demand, healthcare system is not as efficient and effective as it should be to deliver the best possible care
Product - how can Alcidion's products address the problem?My thoughts: inform clinical decision making, improve operational efficiencies, making the optimum use data and enabling clinicians to understand what is the data telling us about the patient, improve patient outcomes (e.g. improved safety and reduced length of hospital stay)
Pathway - what is the pathway/potential for Alcidion?My thoughts: Our three key markets are still under-penetrated. For example, of the 223 NHS Trusts, only 2 (Dartford and Gravesham and South Tees) are using all of Alcidion products. In other words, there are many opportunities for new customer acquisitions, and cross-selling and up-selling to to existing customers. In Australia, Alcidion has not yet penetrate the private hospital sector although progress has been made to lay the foundations through the initial contracts secured with Healthscope and Calvary
People - who are the people leading Alcidion?My thoughts: Alcidion has a strong management team with many of them having a strong track record in their previous roles. For example, Steve Lutz was previously MD of Oneview and
Cerner executive. In the latter role, he was responsible for working with eHealth NSW on several important state-wide health programs. Kate - need I say anything more other than how impressed I am with her?
Price - what is the margin of safety and potential near term price catalysts?My thoughts: I think the current share price is about right with little margin of safety, based on existing public information (for example, current booked revenue of $20.2M for FY21, with 5.5 months left to go). My previous forecast was for a FY21 revenue to $22M but we should comfortably exceed that now after the recent front loaded South Tees contract. Hence, I was comfortable adding to my position at 15.5 cents and 18 cents. I also think that there could be some near term domestic price catalysts in the second half of FY21. However, I am not so sure what is the impact on Alcidion from the latest UK lockdown.
