NUH - A Good Short

I believe NUH is a perfect short at the moment – it is currently at an unsustainable high share price as when you review NUH’s fundamentals they do not support the current $86m market cap.


1)December 4C indicates NUH is still not growing in receipts. Arguably, NUH’s shift to a hearing aid focus is because of a lack of growth as indicated in Dec and Sep receipts which are not growing.

2)What are growing are NUH’s outflows/ payments to acquire. 4C reported – Dec - $4.6m outflows/payments., Sep - $4m outflows/payments., June $4m outflows / payments. The impending April 2018 4C indicates expected outflows of $4.5m with likely higher costs that will attributed to outflows - plant (generally $800k or thereabouts per quarter.)

3)NUH is also in capital raise territory – with only $5.6m in the bank as of the last quarter and with a burn rate of approximately $4m per quarter (after accounting for receipts) to be reported in the next 4C (April) that only leaves NUH with about $1.6m in the bank.

4)Whilst NUH may be targeting new markets and re-aligning itself to the hearing aid market as we know with NUH these things take time and do not show up in receipts very quickly.

5)Hearing aid providers also look to sell hearing aids with the greatest margin even when there are reasonable aids at lower prices. Not surprisingly, Retail providers of aids want to sell them at the highest prices with the greatest margin in order to take advantage of the governmental Hearing Services Program (HSP) fund.

6)NUH’s share price moved up on a lot on the hype of recent announcements that offer a level of perceived ‘blue sky’ but do not actually offer anything in regards to receipts in the near term. This means, more poor 4C’s, more cash burn, capital raises and subsequent dilution for NUH.

7)In my opinion NUH in the short term will move back down into the 7c range. And a good potential short to make 35% profit – especially with a looming capital raise in the next quarter. Longer term - if NUH can’t start to build receipts in its focus toward its hearing aid related market direction and hit cash flow positive – holders could easily expect more capital raises making it a strong long term short.