Convalo Health International Corp. (CXV:TSXV) was down another 3% Thursday to $0.485 per share on nearly 1 million shares traded by 1:59 PM EST. Its shares have been trending lower for months since hitting a high of$0.82 per share in late-April.
Aside from Convalo Health‘s announcement to become a Tier 1 issuer on the TSX Venture Exchange in mid-June the company has been relatively quiet since announcing its purchase agreement with Hollywood Detox.
Convalo Health closes acquisitions in June to boost revenue
Convalo Health is following in Patient Home Monitoring’s footsteps in respect to acquiring revenue via acquisitions.
On June 10th, Convalo Health announced the execution of the final binding purchase agreements for the acquisition of Hollywood Detox Center (Hollywood Detox) and Accredited Rehab and Treatment Services (ARTS), two profitable southern California companies.
Michael Dalsin, Chairman and CEO, of Convalo and current Chairman and Former CEO of Patient Home Monitoring (TSXV:PHM) has proven his ability to seek out acquisition worthy companies, willing to be taken over by Convalo and PHM.
Convalo Health is betting on the expansion of the additions treatment market in the coming years.
Marketdata Enterprises, founded in 1979, has been publishing independent market research studies for 35 years published an article in 2014 titled $35 Billion U.S. Addiction Rehab Industry Poised For Growth. Below is a short excerpt:
- “Marketdata analysts estimate that the drug, alcohol and other addictions treatment industry will be worth $35 billion this year. Moderate 5.2% annual growth in revenues is forecast through 2018. The states provide most of the funding, and insurance coverage is still scarce.
- The industry is comprised of 14,000+ treatment facilities and growing. The typical treatment center has 40 patients and has annual revenues of $548,000.”
source: http://www.marketdataenterprises.com/wp-content/uploads/2014/01/Addictio…
In our latest EBook we reveal 50 leaders who took small-cap stocks to stunning multi-million dollar buyouts. The companies these leaders run today are also described in this one of a kind rolodex of some of the top entrepreneurs and business minds, including PHM’s CEO, David Hayes, operating in North America’s small cap public markets.
Click the below image to get your free copy today.
In Convalo Health’s June 10th’s amended press release Convalo Health reported that:
“Hollywood Detox and ARTS are behavioral health facilities offering detox and residential treatment services for both men and woman in and around the Hollywood and central Los Angeles area.”
Convalo explained that:
“When added to the outpatient treatment services currently offered by BLVD Treatment Centers, Convalo now has a full service behavioral health platform spanning Hollywood and Central Los Angeles capable of treating patients at every level of the addiction treatment continuum. The combined annual revenue run-rate for this Hollywood and Central Los Angeles business now exceeds $23,000,000 and annualized run rate Adjusted EBITDA now exceeds $5,500,000.”
Click here to read the entire press release.
Convalo Health traded more than 1.6 million shares on the 10th of June and traded to a high of $0.61 per share.
Convalo Health’s share price trends lower
Convalo Health – 3 Month Chart
Convalo’s share price has fluctuated in recent months as investors struggle to value the company and its earning potential.
When a company’s stated focus is to “rolling up the US addiction rehabilitation market” a single transaction can change the make-up and every metric related to the said company’s financials. This element has clearly benefited Convalo Health and its liquidity in recent months on the TSX Venture.
Looking back at Convalo’s June 10th press release, the company reported:
“By the end of the year, Convalo will expand this platform to include additional detox and residential treatment centers for both men and women on the west side of Los Angeles.”
Click here to read the entire press release.
The market is looking for Convalo Health to deliver on its forecasted revenue and EBITDA in its next quarterly financials. Convalo’s market cap hovered in the $77.5 million range Thursday afternoon.
This article represents solely the opinions of Alexander Smith. Alexander Smith is not an investment advisor and any reference to specific securities in the list referred to in the article does not constitute a recommendation thereof. THIS IS NOT INVESTMENT ADVICE. All statements in this report are to be checked and verified by the reader. Readers are encouraged to consult their investment advisors prior to making any investment decisions. The information in this article is of an impersonal nature and should not be construed as individualized advice or investment recommendations.
This is not an invitation to purchase any securities mentioned in this report. Pinnacle Digest does not endorse or recommend any of the referenced securities. At the time of publication and distribution of this report (12:30PM PST on July 2, 2015) neither PinnacleDigest.com, its employees or consultants owned shares in any of the mentioned companies in this report. This article is intended for informational and entertainment purposes only. The author of this article bears no liability for losses and/or damages arising from the use of this article. This report may contain technical or other inaccuracies, omissions, or typographical errors, for which PinnacleDigest.com and its parent company assumes no responsibility. We do not guarantee that any of the companies mentioned in this report or on PinnacleDigest.com will perform as we expect, and any comparisons we have made to other companies may not be valid or come into effect.
All statements in this report, other than statements of historical fact, should be considered forward-looking statements. These statements relate to future events or future performance. Much of this report is comprised of statements of projection. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements.
PinnacleDigest.com and its employees are not a registered broker-dealer or financial advisors. Before investing in any securities, you should consult with your financial advisor and a registered broker-dealer. Nothing in this article should be construed as a solicitation to buy or sell any securities. This article is intended for informational and entertainment purposes only. The author of this article bears no liability for losses and/or damages arising from the use of this article.
