Medical Cost Savings = Your Gain, Buy GoodRx & Multiplan
Seeking Alpha Analyst Since 2018
Over 15 years of investment experience in a variety of asset classes including real estate, MLP, index fund, ETF, individual stock, pre-IPO, and IPO. Formerly a financial advisor, I have a passion for helping others achieve their investment goals.
Summary
- Both CCXX & GDRX offer immediate growth opportunity.
- U.S. Health Care Costs are a bipartisan focus posing a threat to many health care stocks.
- If you can't beat them, join them and buy stocks that focus on healthcare cost savings.
We've all heard people say that healthcare costs too much in America. Both Democratic and Republican parties agree that healthcare is a challenge to address. No matter which party wins the election you can be sure that there will be discussions on drug prices being to high and a focus which could put headwinds into the healthcare stocks.
However, there are 2 notable bright spots in the healthcare space. Both of these are not well known and have not been trading long.
The first is Multiplan, which is currently trading as a SPAC, Churchill Capital Corp III ("Churchill") (NYSE: CCXX) which will merge and trade as MPLAN some time in the 4th quarter. Multiplan is a market-leading, technology-enabled provider of end-to-end healthcare cost management solutions, announced today that they have entered into a definitive agreement to merge. The combined company will operate as MultiPlan and will be listed on the NYSE. The transaction implies an initial enterprise value for MultiPlan of approximately $11 billion or approximately 12.9x estimated 2021 Adjusted EBITDA. The transaction will bring to MultiPlan up to $3.7 billion of new equity or equity linked capital to substantially reduce its debt and fund new value-added services. Source:
MultiPlan and Churchill Capital Corp III Reach Agreement to Combine
This company is NOT an insurance company. Instead, it makes money on the savings it brings through its big data analytics. The business model of savings on healthcare costs should be actually be a tail wind with bipartisan support. This is the type of company which can gain investor support from institutional investors. It's largely flying under the radar currently as it's not as sexy as the electric vehicle SPACs which have gained retail investor backing.
The next stock just debuted it's IPO, GoodRx (NASDAQ:GDRX). On the first day of trading, shares surged more than 50% from it's IPO price of $33. Less than a decade old, GoodRx is already worth almost $20 billion! My parents, my in laws and many of the people I know who use prescription drugs regularly all say they save a bundle by using this service. Again, this stock is parallel with the political agenda of lowering the costs of prescription drugs.
You can buy both CCXX before the merger and GDRX now to get in before both surge as they are focused on solving one of the top issues in America, rising health care costs.
Analyst's Disclosure: I am/we are long CCXX, GDRX.
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