Lind Research #15

Hi, and welcome to Lind Research.

Due to my ongoing vacation, I will most likely not send a weekly update next week.

This week's edition is also relatively light on new stock ideas (also because of vacation); instead, I want to introduce a new report format I plan to produce: Discovery reports.

Research

This is the Research section; It includes our published reports, updates, and notes from the past week, covering companies we’ve already investigated in more depth. These pieces reflect ongoing research, updated views, or new insights as part of our active coverage.

PTRK: Road to Value

I sent out a Research update on PTRK during last week, with a rundown on the Q2 report and discussion around the value creative actions the company is taking.

Read the full update here.

Discovery notes

This is the Discovery note section; It marks the first step in our research process — a curated snapshot of companies that have surfaced through different signals. It’s not a full pitch, but a way to highlight early ideas and assess whether they merit deeper research.

I look at many companies each week, and very few are worth researching.

However, I want to structure the initial research in what I call Discovery reports. This will be a lightweight research that indicates the following actions:

• Reject: The idea is not compelling enough based on current fundamentals, valuation, or lack of a clear variant view. No further work will be done unless circumstances change significantly.

• Advance: The idea shows promise and a differentiated angle, warranting a full deep dive including valuation modeling, competitive analysis, and catalyst assessment to determine if it should become an active investment case.

• Monitor: The idea is not attractive right now, but has potential future catalysts or valuation triggers. It is added to a watchlist to track key developments before re-evaluating.

Here is an example of how the Discovery report on PTRK would have looked like.

Discovery Report – Physitrack (PTRK)

• Date: Q3 2024

• Market Cap: ~SEK 200m

• Recommendation: Advance

Business Description

Physitrack is a digital healthcare company operating in two segments:

• Lifecare - a SaaS platform for physiotherapy and musculoskeletal care with high margins, low churn, and strong switching costs.

• Wellness - corporate wellbeing solutions via Champion Health, currently less profitable and undergoing restructuring.

Lifecare is the primary profit engine, with recurring subscription revenue and SaaS-like economics.

Situation

• The share has collapsed from a SEK 73 peak (2021 IPO) to a SEK 8 low, now trading ~SEK 10.

• Microcaps are out of favor, with very low liquidity and retail interest.

• Failed M&A in Wellness and heavy adjustments have damaged credibility.

• Despite these issues, Lifecare continues to grow with healthy margins, but its value is hidden in the current reporting.

Variant Perspective

• Lifecare is undervalued: A high-quality SaaS business that could justify the entire EV on its own.

• Valuation compression has overshot fundamentals: EV/Sales has fallen to ~1.3–1.5x, far below SaaS peers with similar growth and margin profiles.

• Turnaround setup: Management signaling a shift toward profitable growth, cost-cutting in Wellness, and a stronger cash flow focus.

Valuation Snapshot

• EV: ~€20m

• EV/Sales (2024E): ~1.3–1.5x

• Peer SaaS multiples: 5–7x EV/Sales for similar R40 businesses.

• Simple SOTP view: Lifecare alone could be worth more than current EV.

Decision

Advance - The idea is compelling enough to warrant a deeper dive.

Would a 1-3 Discovery report like this be interesting to read? We would still continue with Stock ideas and other research updates.

Please help me out, and vote below.