Plenty more left in the tank
| Running winners' is a successful strategy for generating wealth. The difficult part of course is buying those high potential stocks at the right price, and then being prepared to stick with them over the long term. One good hunting ground is in Healthcare - especially for those companies that are globally scalable, deliver double digit top line growth and enjoy strong patent protection. Tristel possesses all three, along with high recurring revenues and predictable cashflows. Granted the price has already risen nearly 7-fold to 145p, but given the size of the addressable market and pent-up demand for its proprietary infection, hygiene and contamination control products, we think there is plenty more to come. The latest deadly strain doing the rounds being 'MCR-1', which if not controlled properly could cause a "global epidemic of untreatable infections". This is where Tristel's chlorine dioxide (Clo2) chemistry fits in. Clo2 is one of the quickest, safest and most effective ways of killing such microbes and other harmful bacteria like Clostridium difficile. In fact its superior efficacy versus other leading hospital disinfectants was once again demonstrated in a recent clinical trial in France. In terms of trading, the group is reporting an excellent start to FY16 at its AGM today, with H1 PBT set to be "no less than £1.4m (+27% on £1.1m LY)" and on track to hit full year expectations of £2.9m. And for the huge US market they intend to submit an application to the FDA by June 2016, hopefully securing access 12 months later. Clearly this is still early days, but just doing some simple maths we believe that, if the US application was granted, this could add >100p per share to our 140p price target - up from 135p thanks to the natural roll-forward of our DCF calculations. |
Tristel is a manufacturer of infection prevention and contamination control products. Its key technology is a proprietary chlorine dioxide formulation. Co. has three segments: human healthcare, which includes the manufacture, development and sale of infection control and hygine products including products that incorporate Co.'s chlorine dioxide chemistry, and are used primarily for infection controls in hospitals; animal healthcare, which involves the manufacture and sale of disinfection and cleaning products into veterinary and animal welfare sectors; and contamination control, which addresses the pharmaceutical and personal care manufacturing industries.
Equity Development enables companies to become better understood and supported by investors. Since our launch in 1996 we have consistently focused on helping our clients improve their communication and relationships with both existing and potential shareholders. Our clients have come from a wide variety of sectors and domiciles, are both private and quoted and range in size from micro-cap to $multi-billions. We offer free access to company research notes written by experienced analysts. These notes include detailed forecasts, financial models and a fair value. We host regular Private Investor Forums at which investors have the opportunity to hear company directors present, and to ask questions. These are free to attend. We broadcast live Webinars with company management that include active Q&A. We also make the recordings available online. We arrange face to face meetings between private investors and company management. We are active users of Twitter, commenting daily on company news, share price moves, Directors’ Dealings, Equity Development Research Notes & Events.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.