Is This A Signal?, page-64

Got it. Cheers @Rikardo

Given its publicly available information, I am happy to post:

Top picks

Gomes’ picks in this sector are Capitol Health (ASX:CAJ) and Integral Diagnostics (ASX:IDX).

Capitol has a market cap of around $170m at a share price of 21.5c, while Integral has a market cap of $477.5m at a share price of $3.02.

Melbourne-based Capitol owns and operates clinics in Melbourne, regional Victoria, Tasmania and Western Australia.

“They had a failed strategy under previous management where they were trying to become much bigger and consolidate the industry and move into NSW through a large acquisition,” Gomes explained.

“They retreated from that, they’ve repaired their balance sheet by selling those assets and they’re now just going back to their knitting, which is mostly southern state-based community-based clinics.”

According to Gomes, both Capitol and Integral have a “hub-and-spoke” strategy, where they have a few community-based clinics that have high-end diagnostic imaging equipment and a bunch of others that do the lower priced standard tests.

Melbourne-based Integral provides diagnostic imaging services through a network of 45 sites, including 12 hospital sites, and operates under different brands: Lake Imaging, South Coast Radiology, Global Diagnostics and Western District Radiology.

“They’re both interesting businesses and they’re both trading at discounts to the market,” Gomes said.

“Despite the fact the economic outlook looks very uncertain these are businesses that have some degree of defensive qualities to them.”

Victor Gomes is a co-founder of Eiger Capital and portfolio manager for the Eiger Australian Small Companies Fund. Prior to establishing Eiger, he worked on the UBS Australian Small Companies Fund since 2011. Prior to this, he worked at fund managers including BT Investment Management, Platinum, Hayberry & Selector.