So in the usual one minute to midnight fashion or maybe 6am in this case, the EU and Greece came up with a new fudged proposal to bail out the Greek economy for another three years - maybe. I find it sad that in the home of democracy they went though the charade of giving the people a vote on whether to accept or reject further austerity then turn around and sign up for pretty much what had been rejected while extracting little or nothing in the way of concessions or badly needed debt relief. It seems unlikely to me that further spending cuts and tax rises and staying in the Euro is going to do much for the plight of the sickly Greek economy.
Consequently it remains to be seen if they will get it through parliament or not or if there will be a popular back lash against this apparent injustice. I also find it strange that the EU leaders tried to manipulate the vote by saying a No would mean an exit from the Euro, while The European commission president, Jean-Claude Juncker said pretty much the same thing. Meanwhile a week on Junker says "there will be no Grexit, satisfied with deal" with the inconvenient No vote apparently meaning nothing and promptly being forgotten about. This carries on the pattern of No votes in referenda being generally ignored as EU leaders carry on with their grand plan for ever closer union regardless and do their utmost to keep the Euro from falling apart. As a result the poor Greeks are losing much of their sovereignty to the EU which is the ultimate goal of ever closer union at the end of the day. Oh well plus ça change as they say in France, but as investors I guess we should just be happy that the uncertainty is over for now (assuming it is approved by the Greek parliament) and that markets can maybe focus on something else for now until the next inevitable Greek crisis blows up again a few years down the line. Talking of which we have had a trading update from EMIS Group (EMIS) the £600m Aim listed UK leader in connected healthcare software and services which is helping another over spending outfit, the NHS in England, to achieve cost savings. In their in line update today they flagged that the NHS in England has identified the need to create £22bn in efficiency savings to fill a £30bn gap between likely demand and funding by 2020, Tim Kelsey, National Director for Patients and Information at NHS England, has announced that the use of digital technology can create savings of £8.3bn to £13.7bn a year by then. Emis therefore see themselves as being well placed to help with delivering some of this given their strong market positions in some key areas such as GP surgeries, Primary & Community Care, Community Pharmacies and Secondary and Specialist Care software. Longer term readers may remember that this is one I suggested looking into when it was down around 600p per share in 2014. Since then it has done well and been re-rated onto a fairly full looking rating of around 20x with a yield of just over 2% but with 20%+ earnings growth forecast for the current year. As I have explained in the past with posts on sell discipline here and here which outlined why I tend to use those kind of metrics (20x & 2%) as a trigger for re-considering a stock as don't tend to buy stocks on that kind of rating and above. Thus this one is one I have been toying with the idea of selling, but for now I have continued to run it as it continues to be a good quality company which is continuing to perform well and which has seen upgrades to earnings this year. While looking ahead, given the statement today and the separate announcement of another small (£3m) earnings enhancing acquisition, this should help to underpin and possibly lead to further upgrades to earnings. On this basis I'm still just about inclined to run with it given the continued positive trading, but accept that a further upwards re-rating seems unlikely. However if I do find something offering similar quality and growth but on a more reasonable rating then I may rotate into that, so a hold / look to sell up here rather than a buy I would say.
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