David, I looked at CDEN. It's too tough for me to figure, but I'll put it on my watch list and defer to anyone who might have a knowledgeable opinion.
The financials look very good as you point out. I've followed a couple of these dental practice accumulators; the one stock I did buy worked out well for me (they were taken out by a large insurance company). So CDEN could work out very well too, possibly, based on my experience.
There's just something odd about this whole industry. Run by dentists - I'm not sure how good they are as the corporate types they must become. The practices that are bought out have trouble keeping the spirit of the sole practitioner. The guys who get stock seem, imo, to look for exit points. And - surprising to me - the business depends on the economy. (I always thought if people had problems with their teeth/gums they'd go seek assistance. Not so, according to dentists I know. If economic times are tough, lot of dentistry is postponable or postponed.) Anyway,IMO, somehow it is just not so easy to get synergy or profits out of these consolidated dental practices. So earnings IMO are erratic and subject to manipulation as dental practices are bought and brought into the fold. (note: I claim no analytical, financial or dental skills here.)
On the other hand (again -g-), if we look at it like I might look at DAIO, then we just say the heck with the business model - buy based on cash in the drawer and get the going business aspect for free. Which might be possible-- this stock fluctuates quite a bit (?) moving yesterday between 3 3/8 and 4 5/8. Right now, for me, CDEN @ 4 5/8, I just don't see as a compelling buy.
Paul Senior |
