TBRG

TruBridge ($TBRG): Why Major Shareholders Keep Buying Even at Peaks?

11/21/2025 08:36

TruBridge Inc ($TBRG) is capturing investor attention as insider trading patterns around this healthcare IT company are sending signals that differ markedly from market expectations. TruBridge is a healthcare information services company founded in 1979 and headquartered in Mobile, Alabama. Rebranded from Computer Programs and Systems in March 2024, the company provides revenue cycle management (RCM) services and patient care technology solutions to hospitals and healthcare facilities. Its business spans the entire healthcare IT spectrum, from billing processing, collection management, and medical coding to patient portals and data analytics. The most notable aspect is the sustained and concentrated share purchases by major shareholders. According to insider trading data, two major shareholders - Pinetree Capital Ltd and L6 Holdings Inc. - have purchased approximately $10 million worth of shares across over 40 transactions since June 2024. Particularly striking was Pinetree Capital's additional $5 million purchase within just a few days in February 2025, even when the stock was trading near its peak at $27-28. More intriguingly, buying activity has continued into November. With the stock having corrected to the low $20s, L6 Holdings purchased $1 million worth of shares in November alone, while CBO Michael Daughton personally acquired over $1 million in shares. Daughton increased his holdings by 44%, signaling significant executive confidence in the company's prospects. Conversely, President Christopher Fowler sold a total of 11,000 shares across two transactions this year. This suggests somewhat divergent views even within management. However, with over 90% of insider transactions focused on buying, the overall signal remains positive. The stock price movement suggests some validity to these insiders' judgment. $TBRG started around $9-10 in June 2024, reached a peak of $30 in February 2025, and currently trades in the mid-$20s - still up over 100% from last year. Earnings performance also shows clear improvement signals. Q2 2025 adjusted EPS of $0.54 represented a 238% increase from $0.16 in the prior year period and significantly beat analyst expectations of $0.24. Annual revenue of $347 million is growing modestly, while operating cash flow of $38.4 million remains healthy. From a valuation perspective, $TBRG offers considerable appeal. Its price-to-sales ratio of 0.86x is well below the healthcare IT industry average of 1.5x, while its EV/EBITDA of 9.58x compares favorably to the industry average of 12x. Though net profit margins are low at around 1%, this suggests significant room for improvement. The healthcare IT market growth story is also positive. Accelerating digital transformation at healthcare facilities, government efficiency policies, and increasing healthcare demand from an aging population are driving industry-wide growth. TruBridge's solutions like the integrated data platform CHBase and patient portal InstantPHR align with these trends. However, there are cautions to consider. The debt-to-equity ratio of 92.5% is quite high, creating financial leverage risk. Additionally, revenue growth of 1-2% annually is disappointing compared to the healthcare services industry average of 10%. Some institutional investors reducing their positions also reflects mixed market sentiment. Key factors to watch include upcoming quarterly earnings, new product launches or partnerships, and most importantly, whether major shareholders continue their buying. Recent positive developments like re-establishing the partnership with Jackson Parish Hospital could serve as positive catalysts. In conclusion, $TBRG has three positive elements: sustained share accumulation by major shareholders, improving earnings, and attractive valuation. However, high debt levels and slow revenue growth remain risk factors. For investors seeking turnaround stories in healthcare IT, this merits consideration, though a cautious approach accounting for leverage risks is warranted.