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MD - Mednax: Don't Get Seduced By Cash Flow The Business Model Is Breaking Down
Mednax Inc.
Investment Thesis
Mednax Inc. (MD) has lost 75% of its market cap since January 2016. The company has been piling up debt since then to keep up its roll-up growth strategy and to buy back shares. However, unless it is acquired, it appears to be doomed, as I expect a tsunami of write-downs will hit when physicians who sold their practices to Mednax become free agents. These physicians freed from their employment contracts will either require much higher salaries to keep on working for Mednax or will be replaced with more expensive physicians.