Primary Recommendation

Caretech Holdings - High growth and defensive

November 2005

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

With homes in London, South East and the Midlands, CareTech is one of the UK’s largest independent providers of residential care for adults with a physical or mental disability. The shares joined AIM last month and on a PE of 22.6 might be considered to be trading on a pretty toppy valuation. But as we describe below, it looks like one of those rapidly developing businesses which will grow into its valuation. The two props to the strategy are the high quality contracted revenue stream (with most adults likely to spend in excess of 20 years in a home and the service paid for by the NHS or local authority), and high margins with an average fee rate typically being £1,250 per week which makes the business pretty bullet p ...

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Market Comment

Inspace - 10th largest player in social housing

Caretech (November 2012)

CareTech - Foster care division takes off (August 2012)

Caretech - Gain since January tip: 41% (May 2012)

Caretech - Looking dirt cheap (January 2012)

Caretech (December 2011)

Caretech (May 2011)

Caretech (February 2011)

Caretech (November 2010)

Caretech - Rating has never been this low (July 2010)

Caretech - Significant acquisition opportunities (March 2010)

Caretech - Spitting distance of 1,500 beds (January 2010)

Caretech (November 2009)

Caretech - Margins go through the roof: 24.3% H109 vs 22.9% H108 vs 18.8% H107 (September 2009)

Caretech - Exciting move into psychiatric care (July 2009)

Caretech (April 2009)

Caretech - H1 margin surges to 22.9% as operational gearing kicks in (July 2008)

Caretech - Returns to acquisition trail (June 2008)

Caretech - Operational gearing comes barrelling through (May 2008)

Caretech - Well ahead of original expectations (January 2008)

Caretech - Organic growth ahead of expectations (November 2007)

Caretech (September 2007)

Caretech - 1,500 bed target (July 2007)

Caretech (January 2007)

Caretech - Buys 13 new care homes (December 2006)

Caretech - Seems likely to be trading ahead (November 2006)

CareTech (July 2006)

Caretech - Number of beds up 69% since IPO (June 2006)

Caretech (May 2006)

Caretech (January 2006)

With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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