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Since UHC is the largest health insurer in the US, this national contract provides significant advantage to QIPT. This is a quick and easy way to gain contracts that might otherwise take multiple years to materialize.īy signing this national contract with UHC, QIPT has ensured that wherever they expand, UHC will pay for QIPT’s equipment and services. In fact, this is one of the reasons why QIPT, as well as much larger players like Viemed Healthcare ( VMD) and AdaptHealth ( AHCO), employ an acquisition strategy-they acquire not only a given company with its revenue and earnings, but that company’s important insurance contracts within the states where the acquiree operates. Simply put, before this national contract, QIPT could have done business with UHC in, say, Kentucky and Tennessee, but be denied on its billings in Georgia or Florida. Not only is this a laborious and time-intensive process, but there is absolutely no guarantee that an insurance company will ever decide to accept a company in a given state. Absent a national contract, QIPT (and other, similar companies) must establish contracts with insurance carriers on a state-by-state basis.
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While the linked press release simply notes the contract was with “a top 5” health insurer in the US, the company’s homepage (as of the date of this article) has a pop-up appear, noting “BREAKING: Quipt Now Accepting UHC Nationally!” Based on this, it is quite obvious that UnitedHealthcare ( UNH), or UHC, is likely the company referenced in QIPT’s press release.Īlthough UHC is a household name, the average investor likely underestimates the importance of this national contract. On April 26, QIPT announced its first-ever national insurance contract. With respect to QIPT, that type of valuation would lead to the share price increasing at least 70% within the next year, if not sooner.
Vmd companies free#
Once these debentures clear, not only will QIPT’s balance sheet be pristine (no debt no derivatives), but the hedging activity that has taken place over the past year due to various derivatives should be relieved, and the shares should be free to move towards a more standard industry valuation (8-12x EV/EBITDA). While I expect that report to be solid, I believe it is more valuable for investors to be aware-and possibly take advantage of-the possible convertible debenture clearance, which could take effect as early as August 9.
Vmd companies update#
Given these developments, I decided to update my Seeking Alpha followers sooner than the next earnings report. I discussed the significance of this overhang in my last article on QIPT, but will reiterate below why I believe cleaning up these debentures will lead to near-term share price appreciation. On top of that, we could be near a pivotal moment where the company is able to force the conversion of its outstanding convertible debentures into shares of common equity.
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However, QIPT has made multiple accretive acquisitions and announced two material business development wins with large players in the healthcare space recently. I have been holding off on updating the Seeking Alpha community on Quipt Home Medical’s ( NASDAQ: QIPT) recent progress until after they report earnings, likely sometime in August.