July 16, 2017

On Friday, the S&P 500 was up 0.5% to another record high. Toronto was up 0.3%.

CRH Medical was down a withering 28% on Toronto and 27% in U.S. trading. I understand this was precipitated by a negative report from Bank of Nova Scotia analysts. I understand there is a concern about decreases in the fees it is allowed to charge certain large public health plans. The company discussed a decrease in revenue per case in Q1 due to a change in the payer mix but it did not seem to be a big concern. The analyst concerns may or may not be over-blown. I may add a modest amount to my position at this lower price but I don’t want to bet too much on it at least until after the Q2 results come out. I had taken some comfort from the fact that it was recently able to increase its credit line by $100 million. I viewed that as a show of faith by lenders. There may be other concerns that the analysts have identified. I do not have access to the negative analyst reports. The company has not commented on the price decline.

The report for Alimentation Couche-Tard is updated with a rating of Buy. This is a great company and I believe it is poised to report increased revenues and earnings per share due to recent acquisitions.