1. Business now stabilized, cash flow, and margins improving.
2. MRGE has most attractive valuation in sector.
3. iConnect SAAS revenue will now start layering into the business model.
4. MRGE should announce new iConnect partnership agreements and new iConnect modules ready for GA over next several quarters.
5. Reduction of ICD 10 headwind coupled with increasing MU2 tailwind should finally deliver more enterprise deals in 2014 and show resumption of gradual growth.
5. eClinical creates too many business lines and distractions for a small company like MRGE and might be monetized to accelerate debt repayment even further.
6. Strategic and PE buyers will likely revisit.
The confluence of this reduction in downside risk with positioning for unlocking future value creation will likely bring additional favorable Wall Street coverage and enhanced institutional interest. Stock just now starting to act better with upside bias ahead of it.
MRGE is presenting at HIMSS this week. Important opportunity to showcase new products, customers, and vision. There are several conferences in NY over the next few months. Other HCIT companies have announced their attendance but no announcements from MRGE yet. ICAD has started to deliver on their vision and is now attending more conferences. Their stock has been on fire. Great imaging comp for MRGE and MRGE is a much better company both strategically and with long term growth opportunities.
Ferro is apparently not interested and has his hands full with Wrapports. Maybe the previous buyers will get back involved now that fundamentals are reset and improving. Frankly, I would like to see Dearborn get the stock higher this year rather than sell MRGE at this low value.
MRGE has been a frustrating stock to own since last summer. It has now clearly established a nice base. Time for these new expectations and fundamental opportunities to start gradually driving the stock higher this year. Maybe we will now start to see some insider buys again if MRGE is not sold.
"Surges did not execute flawlessly but he was able to tell an exciting story to investors and generate shareholder value, particularly for traders."
Value isn't created with hype... bubbles are as shareholder found out.
Sentiment: Strong Buy
Surges did not execute flawlessly but he was able to tell an exciting story to investors and generate shareholder value, particularly for traders. Dearborn is considered stronger with customer service but is not yet comfortable with investors. However, Dearborn now has realistic goals and an exciting paradigm to deliver for longer term investors. Dearborn and Surges both have their interests aligned with over 1.2 million options and RSUs each. Strategic alternatives and PE firm interest from fall 2012 might finally come back into play with the new board member and with an improving vision, new SAAS offerings, and expanding market opportunities. Even without that, if Dearborn delivers renewed confidence and realistic goals, we should see significant upside bias over the next 12 to 18 months. Surges almost got it done at a bigger number, but Dearborn now has the ability to create lasting increases in shareholder value. Dearborn has earned respect with customers and now has the ability to do the same with shareholders.
Why does Merge rarely attend investor conferences? Management needs to engage rather than ignore shareholders. Merge is small for a public company but has very few hedge fund investors with meaningful positions. For the cost of only 10k shares of Google, a hedge fund could be one of the largest Merge investors and start to push for change. It is clearly time for activism to start unlocking the intrinsic value in Merge. The stock is up slightly from $2 but also way down from $7 in a strong healthcare market. If Ferro is ignoring it, another strategic partner should be allowed to buy it. Any buying from hedge funds here could have an enormous upward bias in the share price.
Sell for $100 to $150 million now that it is cleaned up, has strong clients and is growing top line 20%. Exciting standalone business. Repay debt and focus on HCIT. Analysts love the idea. Just do it already.
MRGE @ 12x EBITDA = $5
MRGE @ 25x EPS = $4
MRGE @ 3x REV = $4.25
MRGE has always traded at a discount because of Ferro conflicts. The Ferro discount may turn into a premium if he delivers strategic alternatives. customers seem to love Dearborn. maybe investors will too in 2014.
This stock has a history of trading back and forth in a $3 to $4 range. When it finally delivers on expanding eClinical with CROs, grabbing share with iConnect, and driving high recurring SAAS revenues, this stock could be a rocket ship. I just hope I am patient enough to still own it when that happens.
They set the bar low. Diagnostic implementations have barely begun to move. When they migrate that huge cardiology data recurring subscription revenue should be substantial. If they get the share price up the suits won't hold much merit.
Realistic expectations provide for positive go forward quarterly reports
Strong EBITDA and Cash Flow both in Q4 and for 2014
Future margin expansion to mid 20s in next few years is terrific
Debt repayment was strong again. Dearborn has definitely shown that he is on top of repaying debt diligently
Risk of downside is now significantly limited with impressive upside opportunities
Headwinds are beginning to subside and tailwinds are starting
New products will drive a much higher level of recurring revenue
Stock was way too cheap with fearful investors. We now have signifiant runway ahead of us
Merge continues to make significant investment in R&D
KLAS wins are great for both Merge and their customers
Dearborn is clearly focused on delivering for customers which will benefit shareholders
Strategic value of Merge is accelerating
Potential buyers will now greatly appreciate Merge with increasing recurring revenues, expanding margins, strong EBITDA, and unique, defensible positioning.
IMO Stock is a buy for the first time in a while
flat revenues for 2014 ex kiosk revs with expanding margins and higher cash flow. stock is too cheap. dearborn has definitely stabilized the business.
I actually agree. Debt repayment in Q4 was impressive. Cash flow was fantastic. Margin guidance this year will definitely attract interest. Getting rid of kiosk revenues and resetting expectations makes a ton of sense. @ only 10x 2014 EBITDA this is a $3.50 to $4.00 stock. Also, Yahoo will pick up 2015 expectations this weekend which will also help. Who knows what happens today, but we will likely see a much higher stock in 12 months. Dearborn finally took his lumps and now owns his future. He deserves credit for that. Buyers will come out of the woodwork over the next few months.
All in all I must say not bad. Better than the $2.20 share price we currently sit at.