# Prism Medical (PM.TO)



## londoncalling (Sep 17, 2011)

This one has recently popped onto my value screens. They are a medical provider of medical equipment(mostly lifting and wheelchair) in NA and the UK). Anybody hold or follow this one? I like the yield (6%). I do like that none of the talking heads (BNN etc) follow this one. Looking for some insight while I begin my DD. They have a market cap of about $44 mill and a PB of 1.33. The P/E is under 10 (Reuters) and I am aware of the issues of investing in micro/small caps. I am hoping the lack of attention can be a benefit and the entry price looks decent. Any insight/evaluation would be appreciated.

Cheers!


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## doctrine (Sep 30, 2011)

I am a big fan of small cap dividend yielding companies. I took a quick look, here are some factors you need to consider:

- Light volume; only about $10k/day of shares are traded; you may have difficulty getting out
- $32M of goodwill and intangibles on the books. This isn't always bad, but if they wrote that down to 0, there's going to be no shareholder equity left. This is not a good sign. 
- Revenue and earnings are down over this time last year. You may wish to look into the reasons behind it, or if they are one time factors, but they only had $0.02 in earnings last quarter.

I see the stock is down about 20% from it's highs, the question is whether or not it has hit bottom. Good luck, but I would avoid until the earnings increase at least until the dividend is covered again. It looks like they've had 2-3 bad quarters and may not be in recovery mode yet. They have maintained shareholder equity over the last year, but they will need improved results to avoid lowering book value. The fact that their entire book value is dependent on goodwill and intangibles, which have increased significantly in the last year, is not a good sign.


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## riseofamillionaire (Feb 23, 2012)

I owned last year but sold when they cut the dividend. They since have reinstated the dividend but I don't have the confidence in the company for a long term hold. Also concerning is the goodwill as mentioned. I think it could work as a trade here but I wouldn't hold a small company like this that sometimes loses money and cuts their divy.


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## londoncalling (Sep 17, 2011)

Thanks Doc and Rise.

My apologies for not posting sooner but I was away at a conference last week. For the time being I am apprehensive about buying this one. I had no intentions of entering a position in the near term. I tend to follow a stick for awhile once it pops on my radar. I liked that it was trading down 20% but am fearful of the makeup of the book value. The dividend cut(although good for the company) is something that does standout for me as not great news. I was considering watching it over the summer (at the very least) to see what the company plans to do. I like the sector but for the time being I think I will either deploy this money into something a little less risky and with a larger cap or hold onto the cash for a greater opportunity. Cheers


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