Published this afternoon: "Valuation, Recommendation We have a...

Published this afternoon:

"Valuation, Recommendation
We have a discounted cash flow valuation (DCF) of $0.54. A DCF is most likely a conservative valuation tool for CAJ, because the long-term growth rates are likely to be much larger as the opportunity for accretive acquisitions in NSW and/or Queensland gains momentum.
The FY15 PEG ratio of 0.51 is excellent, and this ratio is likely to become a more relevant valuation tool as the market gains understanding of the consolidation opportunity.
We have a “buy” recommendation, and a conservative $0.54 valuation/price target."

Also, importantly they say:
"If the co-payment proposal was to pass as proposed from July 1, 2015 there would be an earnings impact for CAJ in FY16. We still believe there would be earnings growth in FY16, but 10-15% lower than if the Senate blocks the proposal. In our view this negative impact in 2016 would be quickly outweighed by strong growth in FY17 and FY18.
The rationale for suggesting strong growth would occur is that the changes would make it very difficult for the smaller practices and it would fast track industry consolidation.

The market position of the three main players and CAJ would likely increase well above the current 40%. This would have a positive effect on earnings margins due to a more positive industry structure.

We expect CAJ acquisitions to continue to be earnings accretive (at least 20%), and especially if there is smaller players that are forced out of the industry"