Today’s Trading Playbook
KEY THEMES
The fourth quarter figures related to Cleopatra Hospital [CLHO] sent a positive vibe about patient volume reflation which was the main drawback during H1 2020 specifically. Meanwhile, a strong margin expansion in Q4 2020 was pretty much expected, given the upping in prices which took place during the entirety of 2020, to compensate for the thin volumes seen earlier in the year. Top line growth in the last quarter of the year was enough to turn a 9% slippage in 9M 2020 into an 11% y/y growth in 2020.
We view the fourth quarter numbers as reassuring as possible in respect with CLHO upcoming performance in 2021. If the effect of higher pricing extends partially in 2021, coupled with favorable volumes, earnings growth should remain in double digits. Having seen its stock punished during 2020 up until now, CLHO is currently trading at 2020 P/E of 24x, too far from the levels it used to trade at during normal times (i.e. mid to high 30x’s), which promises successful re-rating once the market gets a sentiment reset.
Now, on to the top news and analysis for the day.