Looking to buy CVS Group (CVSG)

28th Jun '21 by Terry Dickens

6 comments 517 reads

I am looking to buy (CVSG) CVS Group.

It has a very good run this year and was mentioned in the May Stock Slam and has gone up by a further 10% since then.

I have been doing a bit of digging and found that the Debt ( 161 million) looks very high as against the operating profit of 18.5 million. That makes it (by my calculations) over 7years to pay it back.

The chart looks excellent and the EPS is good too, but the PEG is high at 4.7.

I would like to know if any of you esteem Ladies or Gentlemen have any views on this Company.

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About the Author

Terry Dickens

Premium Member

I am 70 years old and I am the Chairmen and major shareholder in a Mechanical and Electrical contracting business based in Tanzania East Africa. I spend 3 months a year in the UK and 9 months in Tanzania. I have always been interested in the stock market and started buying shares in the 1970s. But started trading seriously since 2007. I only trade the UK market and mainly spread bet with IG Index for the last 8 years. more »

6 comments

Berksbee

28th Jun '21

To my (somewhat old) knowledge they've done little to sort out their underlying IT systems - this is important to fix as it is fundamental to savings and control of the brand. So not on my list - would take some profits if it was. I prefer LON:PETS who've had a good run but are pricy.

Redice

28th Jun '21

https://www.piworld.co.uk/comp...

Might be worth a listen if you haven't already. Good insight into what they do. Remember listening and thinking to buy some the next day. Price went up 5% while I listened to the podcast ! Decided to wait until the price came back a bit. Still waiting.

Christine H

28th Jun '21

in the past 18 months many of my neighbours have bought pets. The cost of pet purchase has rocketed. If you spent £6000 on a puppy you will not hesitate to splash out at the vets.

CVS is one of the shares I bought as a pandemic momentum stock. Vets practices, diagnostics, mortuary, all will be essential to the new breed of pet owners.

Profits have been influenced by social distancing regulations (my pets have not been vaccinated for over a year now. Come the end of restrictions the vets will be first booking).

So I can see where the momentum is, and I can understand the gearing/debt. I will sit on my hands for this share, imo it is a keeper.

timarr

29th Jun '21

With Cvs (LON:CVSG) operating profit is affected by various things, including the non-cash cost of amortising acquisitions. FCF is probably a better measure of their ability to service their (very cheap) debt.

The PIWorld video mentioned below is worth listening to, if interested.

Broadly - demand is recovering at higher levels than pre-pandemic because of all the pets people bought during lockdown. Because pet care needs tend to increase as the animals age then this points to good long term growth. However, the underlying problem of lack of trained staff isn't getting any better.

I hold, and am happy to do so, but wouldn't be a buyer at these levels.

timarr

Terry Dickens

29th Jun '21

Thank you for your positive reply, but I am still 50:50 on buying because of the Debt. Thanks anyway.

Tradeseek

30th Jun '21

Just spotted you post. I added to my CVS holding yesterday now the stock is at its ATH and continuing the steady upward momentum. Please note though I trade stocks as opposed to invest so I get out fast if they start to slide, hence the debt is less of a concern to me. D'Arcy Andrews (May stock slam)

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Looking to buy CVS Group (CVSG)

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About the Author

Terry Dickens

6 comments

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