SSY  Sunlink Health Systems Inc.

Exchange

AMEX

Sector

Health Care

Industry

Hospital/Nursing Management

Market Cap.

15.77M

Vuru Grade

39.50/100

Current Price

$1.67
+0.02 (+1.21%)

Growth Price

$2.50
Undervalued by 49.66%

Stability Price

$3.28
Undervalued by 96.26%

Company Metrics

  • P/E 5.17
  • P/S 0.27
  • P/B 0.61
  • EPS 0.32
  • Cash ROIC -2.79%
  • Cash Ratio 0.16
  • Dividend 0 / 0%
  • Avg. Vol. 41,074.00
  • Shares 9.44M
  • Market Cap. 15.77M

Company Description

SunLink Health Systems, Inc., together with its subsidiaries, provides healthcare services in rural and exurban markets in the United States. It operates in two segments, Healthcare Facilities and Specialty Pharmacy. The Healthcare Facilities segment operates 7 community hospitals that consist of 402 licensed beds; 3 nursing homes, which have of 261 licensed beds; and 1 home health agency. The Spe... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

BRIEF-Sunlink Health Systems- tender offer to repurchase up to 3 mln shares
Reuters - Jan 5, 2017
Sunlink Health Systems, Inc. Announces intention to commence tender offer to repurchase up to 3,000,000 of its common shares.
SunLink Health Systems, Inc. Announces Extension of Tender Offer to Repurchase ...
Business Wire (press release) - Feb 9, 2017
ATLANTA--(BUSINESS WIRE)--SunLink Health Systems, Inc. (NYSE MKT: SSY) announced today that it has extended its previously announced tender offer to purchase up to 3,000,000 of its common shares at a price of $1.50 per share (the “Offer”) until 5:00 ...
UPDATE: Sunlink Health Systems (SSY) Halted on Second Circuit Breaker, Shares ...
StreetInsider.com - Aug 22, 2016
SunLink Health Systems, Inc. (NYSE:MKT: SSY) today announced that a subsidiary has sold its Chestatee Regional Hospital in Dahlonega, GA for approximately $15,000,000.
SunLink Health Systems, Inc. Announces Commencement of Tender Offer to ...
Business Wire (press release) - Jan 10, 2017
ATLANTA--(BUSINESS WIRE)--SunLink Health Systems, Inc. (NYSE MKT: SSY) announced today that it has commenced a tender offer to purchase up to 3,000,000 of its common shares at a price of $1.50 per share (the “Offer”).
SunLink Health Systems, Inc. Announces Intention to Commence Tender Offer to ...
Business Wire (press release) - Jan 5, 2017
ATLANTA--(BUSINESS WIRE)--SunLink Health Systems, Inc. (NYSE MKT: SSY) announced today that it intends to commence a cash tender offer within the next week to purchase up to 3,000,000 of its common shares at a price per share of $1.50 per share.
BRIEF-Sunlink Health Systems unit sells Chestatee Regional Hospital in ...
Reuters - Aug 19, 2016
Jan 28 A new ban on U.S. travel for nationals of seven Middle Eastern countries caught the airline industry unprepared, with flight crew from those states also barred from entering, the International Air Transport Association said on Saturday.
SunLink Health Systems (SSY) Stock Skyrockets, But Why?
CNA Finance (press release) - Jul 8, 2016
Recently, we've heard quite a bit about an agreement between Piedmont Mountainside Hospital and subsidiaries of SunLink Health Systems. Under the ... The company will also lease a nearby medical office building for physician offices and related services.
BRIEF-SunLink Health Systems Q2 earnings per share $0.33
Reuters - Mar 26, 2013
Feb 15 Sunlink Health Systems Inc. * SunLink Health Systems, Inc. Announces fiscal 2017 second quarter results.
Revenue Update on SunLink Health Systems(NYSEMKT:SSY)
Money Flow Index & Trends - Feb 24, 2017
SunLink Health Systems (SSY) shares turned negative on Wednesdays trading session with the shares closing down -0.02 points or -1.18% at a volume of 33,419.
SunLink Health Systems, Inc. and Foundation HealthCare Affiliates, LLC ...
Business Wire (press release) - Apr 8, 2011
ATLANTA--(BUSINESS WIRE)--SunLink Health Systems, Inc. ((NYSE Amex Equities: SSY) today announced that it has reached a preliminary agreement and executed a letter of intent with Foundation HealthCare Affiliates, LLC (“Foundation”) and New Age ...
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for SSY to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate SSY's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$1.67 Current Price

$2.50 Growth Price (DCF)

Undervalued by 49.66%


Growth Rate Assumed by Market: -500.00%


Future Free Cash Flow Growth Rate: 0.0%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$3.28 Stability Price (EPV)

Undervalued by 96.26%


Discount Rate: 15.0%

$0.98 Book Price

Overvalued by 41.38%


Very Poor Cash Return on Invested Capital over the past 5 years

SSY has failed to generate positive returns on its investments in buildings, projects and equipment. This could be due to poor management, lack of an economic moat or the capital intensive nature of the business.

SSY has lost $2.79 of cash for every $100 invested.
Figures in USD. Fiscal year ends in June
20122013201420152016
Free Cash Flow 1.07M -7.04M 2.17M 1.63M -1.88M
divided by
Invested Capital 45.30M 43.10M 43.78M 40.39M 20.99M
Cash ROIC 2.36% -16.32% 4.95% 4.02% -8.94%

Very Poor Return on Equity over the past 5 years

SSY has shown an inability to deliver results for shareholders. This could be due to poor management, SSY operating in a highly competitive industry, or having a weak business in general.

SSY has generated a $11.24 loss for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in June
20122013201420152016
Net Income 1.08M 4.49M -545,000.00 245,000.00 -14.08M
divided by
Stockholders' Equity 29.29M 33.74M 33.32M 33.56M 19.49M
Return on Equity 3.69% 13.30% -1.64% 0.73% -72.26%

Mediocre Business Performance over the past 10 years

SSY isn't a strong business and might be consistently attempting to fuel growth with debt or has trouble staying profitable. The lack of predictability in free cash flow should be concerning for the reliability of future earnings.

SSY has been unable to consistently create value for shareholders.
Figures in USD. Fiscal year ends in June
2007200820092010201120122013201420152016
Free Cash Flow -4.29M -6.66M 2.86M 1.43M 2.14M 1.07M -7.04M 2.17M 1.63M -1.88M

Weak Balance Sheet

SSY's financial position is not ideal. The key is to check whether SSY is using debt to fuel its growth and the sustainability of that tendency. Highly capital intensive businesses (see Economic Moat) follow this route, which can deeply impact the future prospects of the business.
Figures in USD. Fiscal year ends in June
2007200820092010201120122013201420152016
Cash 814,000.00 1.72M 2.36M 1.70M 7.25M 2.06M 2.66M 3.59M 5.97M 3.26M
Current Assets 25.78M 35.17M 37.02M 34.63M 41.07M 30.62M 28.09M 25.78M 25.09M 17.90M
Total Assets 77.84M 111.62M 107.38M 98.49M 89.54M 79.17M 68.00M 63.85M 57.13M 44.84M
Current Liabilities 26.66M 27.07M 25.40M 19.11M 23.65M 31.81M 22.25M 16.48M 10.76M 20.59M
Total Liabilities 41.82M 71.38M 65.61M 56.49M 58.15M 49.88M 34.26M 30.53M 23.57M 25.35M
Stockholder' Equity 36.02M 40.24M 41.78M 42.00M 31.38M 29.29M 33.74M 33.32M 33.56M 19.49M
Current Ratio 0.97 1.30 1.46 1.81 1.74 0.96 1.26 1.56 2.33 0.87
TL-to-TA 0.54 0.64 0.61 0.57 0.65 0.63 0.50 0.48 0.41 0.57

Low or No Reinvestment of Profits over the past 10 years

SSY has either been retaining a small amount of their earnings or has done so inconsistently. A lack of consistency could be due to SSY operating at a loss or them having such a strong economic moat they feel comfortable spending profits on growth. Be wary of future prospects and if applicable, inspect the moat's sustainability.
Figures in USD. Fiscal year ends in June
2007200820092010201120122013201420152016
Retained Earnings 23.94M 25.55M 26.46M 26.57M 15.85M 11.54M 16.03M 15.49M 15.73M 1.65M
Retained Earnings Growth - 6.72% 3.57% 0.39% -40.34% -27.17% 38.88% -3.40% 1.58% -89.52%

Loss Making Entity over the past 10 years

SSY has been unable to maintain profitability. It's Costs of Sales have outstripped Revenue consistently. This is a huge red flag, unless the company has been investing heavily for the future. However, even that is dubious since accurately predicting the future of a company like that is extremely difficult.

$2.10 of every $100 of Revenue have been a loss, on average over the past 10 years.
Figures in USD. Fiscal year ends in June
2007200820092010201120122013201420152016
Net Income 1.40M 1.62M 912,000.00 102,000.00 -10.72M 1.08M 4.49M -545,000.00 245,000.00 -14.08M
divided by
Revenue 143.65M 158.43M 199.25M 197.78M 181.16M 146.67M 108.23M 105.43M 91.83M 63.43M
Net Profit Margin 0.97% 1.02% 0.46% 0.05% -5.91% 0.74% 4.15% -0.52% 0.27% -22.20%

Strong Pricing Power over the past 10 years

SSY has maintained substantial gross margins, suggesting that they have been able to set prices without consideration of the cost of goods sold. This potentially leaves flexibility in inflationary environments to raise prices on consumers and maintain profitability.

$47.98 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in June
2007200820092010201120122013201420152016
Gross Profit 48.61M 55.43M 62.38M 60.73M 56.15M 101.35M 69.29M 67.53M 58.13M 36.46M
divided by
Revenue 143.65M 158.43M 199.25M 197.78M 181.16M 146.67M 108.23M 105.43M 91.83M 63.43M
Gross Margin 33.84% 34.99% 31.31% 30.71% 30.99% 69.10% 64.02% 64.05% 63.30% 57.47%

High Capital Intensity over the past 10 years

SSY spends large amounts of capital buying new equipment or investing in new facilities to stay competitive. Over the long term, those costs may have to be fuelled by debt. Look at the growth of Shareholders' Equity to see if this strategy is having a positive or negative impact.

660.36% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in June
2007200820092010201120122013201420152016
Capital Expenditure 9.04M 8.34M 1.57M 2.50M 2.64M 2.01M 5.02M 1.72M 1.31M 1.45M
divided by
Net Income 1.40M 1.62M 912,000.00 102,000.00 -10.72M 1.08M 4.49M -545,000.00 245,000.00 -14.08M
Capital Expenditure Ratio 647.35% 515.90% 172.26% 2,452.94% -24.64% 186.31% 111.85% -316.15% 535.92% -10.30%

No Dividend History over the past 10 years

SSY has never distributed dividends or has recently suspended their dividend distribution.
Figures in USD. Fiscal year ends in June
2007200820092010201120122013201420152016
Dividend Paid - - - - - - - - - -
divided by
Shares Outstanding 7.81M 7.86M 8.02M 8.05M 8.09M 9.35M 9.45M 9.44M 9.50M 9.44M
Dividend Paid Per Share - - - - - - - - - -
Price at Year End 6.10 0.80 1.86 1.58 1.64 1.27 0.88 1.32 0.93 1.21
Dividend Yield - - - - - - - - - -

History of Stock Buybacks over the past 10 years

SSY has some history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in June
2007200820092010201120122013201420152016
Shares Outstanding 7.81M 7.86M 8.02M 8.05M 8.09M 9.35M 9.45M 9.44M 9.50M 9.44M
Stock Bought Back - -0.57% -2.05% -0.41% -0.52% -13.43% -1.01% 0.02% -0.56% 0.56%
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