ACG UCM med tech shares

[JBmurc]

Brought a position looks undervalued ....

http://www.atcormedical.com/analysts_reports.html

http://www.atcormedical.com/pdf/ACG_300315.pdf

We re-emphasize our view that ACG is significantly de-risked
following the AMA’s initial acceptance of the RPAs’ Category 1 CPT
Code application, and see further, substantial share price upside as
the remaining process plays out over CY15. While this decision from
the AMA does not necessarily guarantee Medicare reimbursement,
we believe it is highly likely that this decision will lead to further
positive outcomes in the remaining process and act as catalysts for
further re-rating. We point to the on-market success of listed peer,
Impedimed Limited (ASX:IPD), as an example of the potential share
price upside following a similar AMA decision and successful
transition through the process. Trading at a steep discount to both
IPD (93%) and biotech peers (37%) with a number of definable near
term value drivers, we reiterate our Speculative Buy recommendation
with a $0.46/sh price target.

Current Mktcap- 37mill @19c

[Wolf]

I looked at them awhile ago but wasn't convinced they are cheap.

Taylor Collison have been lead managers in their capital raisings and also have a significant interest in Atcor options and shares.
So it's worth taking into account that there is a significant conflict of interest.
Their valuation is also based off sales multiples which i significantly disagree with.
The fact that they have done a full financial forecast yet still use a sales multiple, tells me that their DCF valuation probably isn't very high... And doesn't fit their thesis.
FY17 multiple metrics don't look that attractive either.

However ACG definitely has a lot of potential, and the report addresses this.


2)The associated Medicare reimbursement, which we believe will significantly improve the adoptionmetrics for the US clinician market.

3)The attractive pay-back metrics associated with various reimbursement levels detailed above;

4) The significant addressable market for ACG’s device; anda. We estimate that ACG’s total addressable market in the US is c$900m based on c40k to 50kunique practices,
some of which will acquire more than one device, and an average unit price of$US15k.b. Given a 5 year typical useful life, this implies an annual addressable market of c$180m forACG’s device

5) ACG’s considerable medium term earnings growth profile, the momentum of which we expect toaccelerate from FY17 onwards as the benefits of widespread Medicare reimbursement drives strongsales growth in the US clinician market.
To this end, we forecast revenue growth of 46% in FY17 and57% in FY18.

[JBmurc]

Many thanks for the reply Wolf ....not much clue in the Medical field... but they do have many opportunities to grow in the sector ..no need to raise cash anytime soon after recently raising 5mill easy enough ...was hoping the CPT-1 code launch would see me make a quick profit to go with the ELM trade I did last few weeks ...also good for me to look outside the resources sectors I've focused on last 15yrs

Any others in the medical/tech field your believe has good short term trading opportunities be great to here

[Wolf]

No problem JBMurc, i don't have much of a clue in the Medical field either. Just my 2 cents.


UCM- Uscom is the only healthcare stock i currently hold.

At 13c they have a $12.5m Market Cap with $2m cash in hand from a recent capital raising.
What i liked about the capital raising is that they kept dilution to a minimum and the majority was used for their recent acquisition of Thor.

They have a low cash burn and strong gross margin products. (USCOM1A 80%, BP+ 70% and Thor products circa 70%.)

Sales revenue for 2015 was about $1.8m comprised of almost entirely USCOM 1A product sales, and will pick up with the rollout of BP+ and further expansion.
Strong sales growth of 59% for FY2015 and are targeting $20m Revenue by 2020.
With their strong margins i estimate they could be cash flow positive in late 2016, and operationally cash flow positive in 2017.
Kind of hard to value, have still been trying to work out fixed costs growth. But seems really cheap to me in comparison to other healthcare companies.

They also were granted, and will benefit from the CPT code for their products USCOM 1-A and BP+.
When ACG announced the CPTI code they had a 100% price spike while UCM barely rose.

Another healthcare stock i quite like is Crytosite (CTE)

MC = $11m
OCF = $1.4m
Cash = $4m
The have a 5% net yield around current prices and produce alot of cash.

2015 report net profit was impacted by an increase in operating costs from restructuring towards growth.
Definitely cheap from a valuation sense but i'm a bit concerned about growth potential.
Company hasn't gone anywhere in quite a few years and i'd like to see some sales growth before buying.

I've got a 1-2 year outlook on those however.

Short term i think CGS,CMP,WRR,PEH could be in for a bounce, but i don't really trade.

[JBmurc]

Yes always looking for new jnr-micro cap shares to look into ..esp outside the resources sector pretty much got that covered these days
Medical & tech other sectors I like the look off currently ....

I like to have a mix of very short term trades to mid term holds if the company hasn't got upside within 12-18 months I'm not too interested

[JBmurc]

Just been checking out UCM hard to believe while they have Growth in revenue of 50%+( $3.5m revenue in FY16) their SP have fallen from 25c to 13c nearly 50% down last year in market value ??? and going from the market depth there is just no much interest at all with major gaps hard to trade .? ..now being a micro-cap with a 70% holding of shares by the top20 will do this ...but then compared to the likes of ACG
looks very sleepy

Am interest in UCM ....will see how ACG plays out

[JBmurc]

Medical Equipment Stocks for Risk-Takers

By Bob Kohut | 07.09.2015

It has been 25 years since Australia has seen a recession but the financial press is abuzz with talk that the remarkable string may soon be broken. Add to our local worries the concerns about a Chinese led slowdown in global growth and you have a recipe for a bumpy road ahead.
Investors who lose sleep over daily, weekly, or monthly swings in stocks should stick with fixed income investments. Investors with an appetite for risk cautiously approach the current investing climate as a possible buying opportunity. Should the doomsday scenarios prove true, are there any safe sectors in which to look for investments?
People need to stay healthy regardless of global economic conditions. You don’t forego needed medical treatment because of the potential of a recession. In addition to the defensive nature of the demand for healthcare there are the substantial tailwinds for healthcare stocks from an ageing population and the growth of the middle class in emerging markets.
This is not to say there is no risk with investing in healthcare stocks. Even long-standing and successful healthcare companies are at risk from changing government regulations, new competition, loss of patents, and failure to get regulatory approval of new treatments. The risk is heightened in start-up companies in early stages of development and testing.
According to Shane Storey, head of research at Wilson HTM Investment Group here in Australia, medical equipment stocks are less risky because “devices can find their way into the market faster than drugs, and investors get rapid and authentic feedback as to whether the technology is any good.”

Canaccord Genuity analysis crunched the numbers to compare the share price performance of the ASX XJO against ASX medical device companies and ASX drug developers. Here is the chart covering Calendar Year 2013 through early 2015.
Two of the hottest medical device stocks on the ASX in 2015 have slumped by over 10% since the current market declines began in earnest on 19 August.
Nanosonics Limited (NAN) makes a disinfection product called Trophon® EPR to combat HAI’s (healthcare associated infections). It is used on ultra sound probes, which cannot be disinfected via heat. Think of the number of ultra-sounds performed in hospitals around the world and you get an idea of the potential of this product.
Impedimed Limited (IPD) has a diagnostic system that can detect an after-effect of cancer treatments called lymphedema, a swelling of arms and/or legs. Both stocks have been on a steady upward trend until the recent market drop. Here is a one year chart comparing the two companies.

These two stocks are not the only medical device manufacturers with potential. The following table includes one stock that bucked the downtrend with a surprising increase, and three others with percentage drops.
Column 1 Column 2 Column 3 Column 4 Column 5 Column 6
Company​

(CODE)​

Market Cap​

Closing Share Price​

19 August​

Closing Share Price​

3 September​

% Change​

Year over Year %​

Change​

Nanosonics​

(NAN)​

$366.5m​

$1.70​

$1.30​

-23.5%​

+27%​

Impedimed​

(IPD)​

$302.1m​

$1.16​

$1.03​

-11.2%​

+133%​

Reva Medical​

(RVA)​

$242.7m​

$0.57​

$0.72​

+26%​

+397%​

Somnomed​

(SOM)​

$126.1m​

$2.79​

$2.47​

-11.4%​

+24.4%​

Compumedics​

(CMP)​

$45m​

$0.31​

$0.27​

-12.9%​

+157%​

AtCor Medical​

(ACGI​

$37.8m​

$0.24​

$0.19​

-20%​

+102%​


Buying on the dip can be a sound strategy if the dip is not due to a fundamental change in the company. For start-ups like these there are few hard numbers to look at, so we are talking about things like regulatory changes, approval delays, or impending competition. Let’s look at each of these device manufacturers to see if there is anything afoot that might have contributed to the price drop. Note that all the stocks have seen healthy share price increases year over year; and one, Reva Medical (RVA) – a manufacturer of a device to treat coronary artery disease – not only showed the highest yearly increase, but also went up despite the global headwinds of late. Nanosonics has distribution arrangements in place with Miele in Europe and General Electric in the United States. The company reported its first profit back in February but its 31 July release of quarterly results showed a slowdown in sales, which was expected as the company is establishing direct sales operations in North America. HAI’s are an increasing problem likely to lead to stricter guidelines and regulations. This would be yet another tailwind for this company. Nanosonics has been on the radar screen of investors for several years. The company’s total shareholder return over three years is 38.2%.

Impedimed’s share price took a leap northward back in November when its flagship L-Dex procedure got its CPT1 code – an approval mechanism deeming a procedure medically necessary -- from the American Medical Association for reimbursements at a rate of US$116 per assessment versus the US$30 many analysts had expected. The company reported its Full Year 2015 earnings on 27 August with a 38% revenue increase but a continued loss, increasing from a loss of $3.5 million a year ago to $4.9 million. Investors liked the revenue increase enough to bump the stock price from $1.06 to $1.09.

Reva Medical (RVA) may have seen the most share price appreciation year over year but it also may be the riskiest stock in the table. Coronary artery disease represents a massive potential market for Reva’s device, called a “scaffold.” Basically it is a non-metallic stent made of a polymer substance that is “bioresorbable,” meaning the scaffold disappears as it is absorbed by the surrounding artery. While this sounds revolutionary the company has a single clinical evaluation of 112 patients in Australia, Brazil, Europe and New Zealand that began in December of 2014. The trial is expected to last five years with data released at nine and 12 month intervals

SomnoMed (SOM) has a device called SomnoDent for treating sleep apnea disorders. What is unique about this product is that resembles a simple mouth guard that keeps the mouth slightly open during sleep to allow breathing. Sleep apnea disorders are commonly treated by CPAP (continuous positive airway pressure) devices that are essentially machines that pump air to keep breathing passages open. There is a significant market for people who cannot tolerate a CPAP device. In addition, the cost of the device is far less than a CPAP machine.
The company scored a major breakthrough on 22 June when it announced the US FDA had approved the use of a micro recorder in SomnoDent devices, allowing physicians to monitor and track patient progress. This is the only product with recording capability on the market.
SomnoMed sells its product direct in the Asia Pacific region, Europe, and North America. Full Year 2015 results showed a 13.8% revenue increase along with NPAT (net profit after tax) increase of 47.1%. The revenue rise broke sales records in all three of the company’s geographic markets.

Compumedics (CMP) provides computer based diagnostic systems targeting three clinical areas – sleep, neurology, and cardiology. Compumedics systems are sold to hospitals, medical centres, and home care providers.
Full Year Results release on 26 August were positive and resulted in a slight rise in stock price from $0.28 to $0.30 which has since dropped to $0.27, as of 3 September. The company saw sales growth in all its geographic markets – 16% in the US; 110% in Asia; 19% in Europe; and 6% in Australia. Revenues increased 9% and NPAT more than doubled, rising from $0.9 million to $2 million.

Compumedics is expanding in the US, China, and Germany and is planning to commercialise a cloud-based sleep diagnostics platform.

AtCor Medical (ACG) has developed the SphygmoCor system for diagnostic and management purposes in the cardiovascular space. The company operates in the America, Europe, and the Asia Pacific Region. The system is non-invasive giving it a competitive advantage over surgical diagnostic methods. On 11 March the stock price got a big boost when the company announced that the American Medical Association (AMA) was recommending a Category-1 code for AtCor’s SphygmoCor blood pressure device. This goes into effect in January of 2016 and AtCor went through a two capital raises in July to raise funds for additional sales and service personnel needed for the January launch. The Category 1 Code has caused some analysts to hype the stock as the “next Impedimed.”

Although one can never be 100% certain about anything in share market investing, it does appear that the price drops in all of these stocks was a result of global headwinds, not internal issues.

[Wolf]

Just been checking out UCM hard to believe while they have Growth in revenue of 50%+( $3.5m revenue in FY16) their SP have fallen from 25c to 13c nearly 50% down last year in market value ??? and going from the market depth there is just no much interest at all with major gaps hard to trade .? ..now being a micro-cap with a 70% holding of shares by the top20 will do this ...but then compared to the likes of ACG
looks very sleepy

Am interest in UCM ....will see how ACG plays out

You would have done well with ACG today! Up 20%, not sure why though.
With UCM the 15c capital raise triggered the drop. Illiquidity isn't helping at the moment with the volatility either.

[JBmurc]

Yeah sold the bulk at 23c ... Trying to buy a few UCM but not confident with such nil volume of late

[percy]

And if you don't want to trade,but be at peace with the market,and yourself,yet have a share that is going to give pride of ownership, and every increasing eps growth, which will drive the share price up for years to come,you can join me on the PGC share register.!! lol.

[macduffy]

Speaking of med tech companies, recently listed Adherium - ADR - may be worth a look. New Zealand company listed on ASX last month, develops " smart" medical devices of which "smartinhaler" is the first to be commercially successful. Shares have/are traded above issue price.

Disc: Interested but not holding.

[JBmurc]

Wow looks like I picked the right entry price but not the exit ....25.5c high so far today from ACG >>> still trying to get a few UCM

[JBmurc]

ACG 26.5c close :(

[JBmurc]

Finally getting some UCM >> I agree I think these guys have got more upside percent wise than many other in the same sector >

[JBmurc]

Uscom (ASX:UCM) has highlighted a report today on the shockingly deadly impact of Chinese air pollution as the company pushes forward with its non-invasive cardiovascular and respiratory device.

The company which specialising in cardiac, vascular and pulmonary monitoring devices noted that 1.6 million each year in China were related to pollution induced cardiac, vascular and pulmonary disease and that 55% of all deaths were caused by cardiorespiratory disease.

Data from the University of California study was based on Chinese air monitoring figures and is interpreted as confirming Uscom’s growth strategy in a number of key products.

These products include the Uscom blood pressure device and the Thor products, which are envisioned as being adopted as standard home care monitors of asthma and COPD. Discussions are ongoing for distribution of the Thor devices in the Chinese and U.S. markets.

The new suite of Thor digital spirometry devices is expected to slipstream Uscom’s flagship USCOM 1A and Uscom blood pressure products and expand Uscom technology into practice-leading positions in cardiac, vascular and pulmonary applications.

Uscom’s Thor Laboratories business is expected to increase the company’s revenue by A$500,000 and support its forecast FY2016 revenue estimate of circa $3.5 million+.

Uscom had revenue of $2.04 million in FY2015, up from $1.38 million in FY2014, $1.0 million in FY2013 and cash of $2.5 million.

Uscom’s acquisition of Thor last month gives the company access to accredited manufacturing close to its growing markets in Europe and the U.S.

[JBmurc]

UCM just put out updated Presentation ..Looks very undervalued @12.5mill Mrktcap ..

http://www.asx.com.au/asxpdf/20151002/pdf/431t3s9dlmry0q.pdf

[JBmurc]

UCM up trading @ 17c good to see was only 13c only weeks ago.. have now sold out for a tidy profit ..will keep an eye it though and maybe re-enter if it pulls back

[Wolf]

Nice trade, ill be waiting for the quarterly and reasses.

[JBmurc]

Nice trade, ill be waiting for the quarterly and reasses.

Yeah sounds like It sound be good .,,should have kept as I do like the longer term outlook ...maybe on pullback

Hope ya still got your ORS ,,,this will take-off soon enough... my Xmas present

[JBmurc]

ACG-33c ... damm it...

[JBmurc]

Right ACG back to 19.5c and I'm back in ....now bring on the right announce get back to the 30c's

[cammo]

Talk about putting lipstick on a cheap pig. MVP uses a very old halogenated ether which is quite toxic. NZ + AUS have been the only countries using it for a long time, probably cos they still allow it to be made in oz. Stick a gimmicky inhalation device to it to "deal" with its very low vapour pressure/high boiling point and throw some marketing (for making trauma analgesia easy administrable at the accident site/paramedicine) behind it and presto! International sales over the horizon.
might be worth throwing some beer money at it........

[Well Endowed]

picked up a few UCM over the past few weeks after following for a long while. Pretty quiet on the boards (both here and HC) but management there seem to keep issuing updates and studies, the most recent of which below:

Not a bad endorsement that....!
"The BP+ is currently on board the international Space Station for critical monitoring of brachial BP and cBP in astronauts"


http://www.asx.com.au/asxpdf/20160119/pdf/434g2w7kng4lgn.pdf

[Well Endowed]

UCM, fairly plain/expected quarterly. Hoping for a bit more commentary in the HY reports in a couple weeks time.

[Well Endowed]

UCM, a few reasonable announcements recently. Still doesn't seem to be many followers. I imagine it will take some solid revenue gains before anyone looks to get involved. But seems to be tracking nicely in my opinion.

NHS tie in with UCM BP+ product:
http://www.asx.com.au/asxpdf/20160314/pdf/435swq97q5lhjf.pdf

Appointment of new Director a Former J&J executive:
http://www.asx.com.au/asxpdf/20160323/pdf/43614mlb414s07.pdf

[JBmurc]

UCM, a few reasonable announcements recently. Still doesn't seem to be many followers. I imagine it will take some solid revenue gains before anyone looks to get involved. But seems to be tracking nicely in my opinion.

NHS tie in with UCM BP+ product:
http://www.asx.com.au/asxpdf/20160314/pdf/435swq97q5lhjf.pdf

Appointment of new Director a Former J&J executive:
http://www.asx.com.au/asxpdf/20160323/pdf/43614mlb414s07.pdf

Yes some don't believe in their main product the blood pressure machine that's very expensive ...I'm no expert so will see how it plays out ...
like we know if the numbers are right the market will continue to drive higher

ACG bounced of recent 14c lows (down some 50% on NOV15 highs) .... close 16c .......latest news Patent granted in USA (ACG)
Received notice of allowance from the United States patent and trademark office of a new patent "brachial cuff" in USA
Says Atcor has begun a sales campaign initially targeting four key metropolitan areas in the US..

Not holding but well worth keeping an eye on..... thinking ACG could well reward ...has a record of moving fast if the market falls in love again with ACG ...100%>>>etc

[Well Endowed]

UCM:

http://www.asx.com.au/asxpdf/20160412/pdf/436g8yvgmdx2p0.pdf

Narrowing quarterly loss, further positive news releases the past couple weeks, and even a little SP appreciation to 20/21c. Shaping up nicely. Still seems like more of a 12mth hold in my opinion.

[Well Endowed]

creeping up, decent turnover today (by UCM's standard). Their monthly regurgitated presentation still looks the business. Happy holding.

[JBmurc]

UCm certain been a great mover this year .....much better than ACG

here is a latest research report on ACG spec Buy ,,,,nothing to exciting here ---http://atcormedical.com/wp-content/uploads/2016/05/ACG-Stock-Research-01-020516.pdf

disc - not holding either

[cammo]

LCT 25% up following successful 81 week result of implanted cells. Anyone else holding this ?

[Well Endowed]

Good announcement today IMO for UCM, there is huge opportunity with this announced Chinese company and they are a targeting for US$48.2m over 5years (nearly 10m/pa). Current revenue is approx A$2m/pa which illustrates the potential. CEO calls it 'transformational' - the Share price agreed initially trading as high as 28c, currently sitting around 25c, up on the day on good turnover.

http://www.asx.com.au/asxpdf/20160616/pdf/437xvkh5rygqf2.pdf

[JBmurc]

Very nice .....your be stoked W.E ...target sell price or is it a long term hold ?

[Well Endowed]

yeah has been creeping up nicely, some good turnover over the past couple months. I'll review at 36c/Mcap of approx 36m (doubling up), hoping the trend continues. As could turn into a LT hold if they continue to produce some solid announcements. Are you following any other Medical sector companies? I'm still sitting on the resource-stock sideline.

[JBmurc]

Only following a few shares mostly resource sector ASX ........... really wish i held onto my UCM

[Well Endowed]

yeah been watching with interest, but still find the cycles too short term, as each metal becomes flavour of the month before falling into obscurity again. Makes any attempt at long term value rather difficult. Fortunately managed to dodge a couple bullets - timed my exit from AKK to perfection awhile back, But haven't dared chancing fate twice! I have the risk appetite, but struggle to as so much tends to hinge on drill results which seem like a lucky dip.

UCM a bit quiet today, but still holding up nicely.

[Wolf]

I used to hold but ended up selling as managment really pump the stock, which isn't neccesairly bad but isn't very professional. Their presentations really put me of with their share price projections and commentary on price. I do think their product BP+ has a lot of potential however and will be a key driver of revenue growth going forward (existing revenue growth has come from 1A). The release of their SprioSponic suite will further driver revenue in 2017. B+ still needs to get CFDA approval which is a prerequisite for the agreement today. They expect first revenues in Q1 FY17 which suggest they should achieve this shortly. Achieving CFDA approval is very important for getting further distribution agreements and triggering the ones they have in place. It's worth noting the $48.2m USD in revenue is a target and when you take into consideration their existing projections I think there is need to be more conservative. In October 2013 they signed a BP+ $6.6m sales agreement with China Pioneer for after they achieved CFDA approval. In the ann they said they were expecting this in 2014, before changing it to 2015 and now we're still waiting. So the real issue for me is I'm very sceptical of everything they say which makes it hard to figure out where they're heading. They've recently raised capital and I think they should reach breakeven (taking into account R&D rebates and grants) in 2017 although more than likely additional capital raisings will be needed to drive growth. Need to do more work on them, think there is potential here but hard to judge.

[Well Endowed]

some good accumulation of late on smallish turnover, but creeping in the right direction. Sitting at 29.5c/31c, last traded 31c.

Recent Patent news:
http://www.asx.com.au/asxpdf/20160711/pdf/438h3cfss57sjw.pdf

[Well Endowed]

up to 33/34c, hit an intraday 12mth high of 35c on turnover of $51k. Steady as she goes!