should spike on monday

CAJ got a wrap from Alan Kohler in his Eureka Report this morning.

Generally when he does that a share will spike.

Yep – from less than 4c in 2012, to 60c now. I wish I’d interviewed this bloke two years ago – even last year would have been good. I’m sure you agree.

As you might expect, the stock looks expensive now: PE of 47, dividend yield of 1.3% and price-to-NTA of 59 times. But I thought it was worth talking to John because it’s clearly a company to watch. Sales and profits are growing rapidly and the business still only operates radiology clinics in Victoria – NSW and Queensland beckon and, indeed, he’s already planning acquisitions in those other states.

John is an accountant, not a radiologist, and he started this business 12 years ago (he’s still only 41) because he loves the cash flow. Nearly all of the money comes from the Government, there are no bad debts and he’s paid in 48 hours. John still owns 8% and is the largest shareholder, and one of the biggest shareholders with him is Alex Waislitz’s Thorney Investments (who knows how to find good companies).

The most expensive machines are MRIs, at about $1 million each. Capitol health has seven of them, with another five in the works. In our interview, John explains how the business works, and what he’s going to do with it in future. It’s fascinating. You can watch it here.