NAN - Infection Control

[KW]

In light of the renewed focus on transmission of infection within hospitals due to Ebola, it is probably timely to give NAN its own thread. I've been trading this one in and out a bit, since it first began to look like it was turning cashflow positive. Sales are increasing and profitability is not too far away. I would imagine that the Ebola preparation that hospitals are currently undergoing will also put a spotlight on products such as NANs, which should give sales an extra boost.

Their business is a new method of disinfecting ultrasound probes - through the use of nanoparticles to coat and sterilise the entire probe, including the handle. The old way is simply to wipe the handle down as it couldnt be put in liquid, which gave rise to the possibility of disease transmission. NAN sells their disinfecting equipment worldwide, through partners such as GE, Toshiba and Miele (makers of ultrasound machines). Sales are growing strongly, and they still have more markets to enter.

The beauty of NAN is that sales of the equipment make up only 40% of their revenue, the rest is from selling consumerables and annual service contracts. This is regular and recurring revenue, which will increase significantly as the installed base of machines grows. Revenue is global so NAN is a beneficiary of a falling A$.

NAN is currently quite richly valued, at approx 10x FY15 sales with a market cap of $258m, off the back of a presentation that states potential NAN revenue is around $300m per year. This makes timing of entry a bit tricky (hence I've been trading it). But this company seems ready to roar, and with a good product it should go on to become a strong profitable international healthcare company.

[stoploss]

Sounds like a plan , I am in for a small punt .

[BFG]

How soon will they see $300M rev per year KW. Seems pretty richly valued unless growth goes exponential soon. Can only build castles in the sky for so long until investors demand results!

[stoploss]

Hi its NAN, my ears are burning :p

Nice summary of the state of play over at sharecafe.
http://www.sharecafe.com.au/cafetake.asp?a=AV&ai=32756

Thanks KW , wish the rest of my portfolio looked as rosey as this one :)

[skid]

With the rise of super bugs alone and the diminishing effect of antibiotics,it seems almost negligent for hospitals not to embrace this technology.
hospitals can be a dangerous place:(

[skid]

With the Australian market closed ,Im getting 2 different SP for NAN between Direct Broking and Hot Copper--any one know which is right?

[skid]

Closed at $1.125.
Interesting --Im still getting 113 on HC site (on their graph -SP-etc on the right)(guess Ill stick to DB for the actual SP) With DB having the depth I sort of figured it was the more accurate ,but just thought it was a bit weird.

[skid]

Moving into a new facility with more capacity has got to be a good sign.(at not much more cost to them)

[BFG]

For another very interesting medical diagnostic device, see TRU on the NZX.

Are you being paid by these guys? You're prettymuch advertising.

WARNING - if you want the TRUTH on TRU, go to the thread on NZX or look up Chalkies article on it. Very revealing!!!

[skid]

Moosie -thanx for the heads up-but really..he didnt even put the post on this thread:eek2:

Remember---- Santas making his list ..he's checking it twice......:D

[BFG]

Moosie -thanx for the heads up-but really..he didnt even put the post on this thread:eek2:

Remember---- Santas making his list ..he's checking it twice......:D

It has been deleted after I reported it. Quite telling eh?

I get coal every year. Perhaps I should load up on some BRL? :D

[skid]

Looks like investors have taken a bit of notice today -up 4.5%

[pietrade]

Are you being paid by these guys? You're prettymuch advertising.

WARNING - if you want the TRUTH on TRU, go to the thread on NZX or look up Chalkies article on it. Very revealing!!!

You're right on. Chalkie's research sure told me a few things I'd not been aware of. I assumed that DYOR was a given.

[stoploss]

Someone lit the touch paper today

[stoploss]

Thanks for the tip KW, shows what type of year I have had .This is sitting 3rd behind CAJ and KME in my portfolio .....

[Minerbarejet]

Now there's an idea. Can NANs flash sterilizer cleanup TRU's probes as well?:)

[BFG]

Uh oh, the PEB forum is being exported!

Funny that Hank never mentions these "overwhelmingly" negative factors on the PEB thread, yet you could easily attribute them to that company as well.

Hmmmm...

[skid]

Don’t get suckered in by the Hype and spin from this company - I see you are still blatantly ramping this stock in a pump and dump exercise. But, I wouldn’t deliberately provoke because I know some are emotionally attached to this share. Oh, what is this easily replicable bit of kit that uses hydrogen peroxide to sterilise ultrasonic probes – one competitor is the lowly alcohol wipe (ha ha).

Clinics and hospitals are notoriously slow to change and then there is the risk of litigation from a failed cleaning cycle



The ultrasonic sensor manufacturers are not sitting back and letting this upstart rumble their party and the new generation have the cleaning cycle included with off the shelf consumables because they can see where parasite products destroy their product line. Then of course there is the sales and marketing - big pharma clip the ticket big time and pocket loot from these sales?

Let’s just see where the sales go and I think a comparison to HP printers and fancy air fresheners (PEB thread) is a great analogy, because it is certainly not earth shattering technology. :D :D :D :D :D :D

And you too Hancocks (even on the same day) welcome aboard--looks like we are in for some healthy debate

Your right Miel-GE-Toshiba-will certainly take their cut of the product --Its a different market strategy than PEB(going in on the back of big strong partner distributers. (also remember the equipment is only 40% of revenue)

Your point about the big players will not sit back and let this upstart rumble the party is an interesting one because they are the very companies that make the machines and are backing NAN---If you were another competitor-who would you rather lock horns with,,,,, Miel-Toshiba-GE......or PEB

Another interesting question : Is prevention any less important than diagnosis.

Looks like some pretty reputable companies are willing to back the alternative to the lowly alcohol wipe

But make no mistake --Its a spec play ,like PEB, but it looks to be a bit further into the''derisked' category.

Im sure some would prefer to take a punt on both PEB and NAN rather than enter a competitive slinging match.

You've put alot of skin into PEB and its great technology.I guess the main difference is that they are going it alone. Its like bumping up the odds on a bet--if you win ,you win bigger stakes--same goes for the opposite if it doesnt do so well.

In a field where institutions are slow to change -I know who I would want backing me

[skid]

Don’t get suckered in by the Hype and spin from this company - I see you are still blatantly ramping this stock in a pump and dump exercise. But, I wouldn’t deliberately provoke because I know some are emotionally attached to this share. Oh, what is this easily replicable bit of kit that uses hydrogen peroxide to sterilise ultrasonic probes – one competitor is the lowly alcohol wipe (ha ha).

Clinics and hospitals are notoriously slow to change and then there is the risk of litigation from a failed cleaning cycle.

The ultrasonic sensor manufacturers are not sitting back and letting this upstart rumble their party and the new generation have the cleaning cycle included with off the shelf consumables because they can see where parasite products destroy their product line. Then of course there is the sales and marketing - big pharma clip the ticket big time and pocket loot from these sales?

Let’s just see where the sales go and I think a comparison to HP printers and fancy air fresheners (PEB thread) is a great analogy, because it is certainly not earth shattering technology. :D :D :D :D :D :D

Emotionally attached? funny you should mention that.
I cant speak for others but if this chart gets to the ''sell'' level, I wont hesitate to push that button--Having said that-those who know far more than me have shown that there is a fair way to go before we are in that territory

[skid]

For those who have only just heard of NAN or have been involved in debate--Heres the lowdown from a while back

http://www.morgans.com.au/Blog/2014/September/Nanosonics.aspx

[skid]

There certainly has been interest of late--guess Im not the only one atm who likes the look of the fundamentals of NAN

[skid]

Ive never seen so many trades of 1 share before--crazy..
Should be getting the sales numbers pretty soon--next week?

[NZSilver]

Ok - just digging a bit deeper on this one. First quarter cash flow +ve by approx 2 million. So how likely are we to see a profit come fy15 and is it going to be 8 million (2 mil/quarter x 4) or greater with increased growth or less due to >expenses? Or are some quarters worse than others for sales? What I like as nearly 50% rev comes from consumables. Anyway would like others thoughts. Haven't bought yet

[skid]

Ok - just digging a bit deeper on this one. First quarter cash flow +ve by approx 2 million. So how likely are we to see a profit come fy15 and is it going to be 8 million (2 mil/quarter x 4) or greater with increased growth or less due to >expenses? Or are some quarters worse than others for sales? What I like as nearly 50% rev comes from consumables. Anyway would like others thoughts. Haven't bought yet

There is quite a bit of info in previous posts--there is an update coming soon (this week?) so that will determine alot--(its been good to me so far..)

[skid]

Good report --An increase of 3.71mil(thats up 81% on the corresponding quarter last year)--.71 mil over your conservative estimate KW (pretty good guess)---Looks like they are on track and progressing nicely

[baller18]

dammit, thought i'll put my money in ofx instead of nan. Oh well!

[skid]

Gives PEB something to aspire to

[ShareFodder]

Market seems to like the NAN move to direct sales. Personally I think it depends on who told who to eff off - if NAN said to GE, "thanks, we'll take it from here" then good on them, they must be very confident in their product. If GE said to NAN, "thanks but we're no longer interested in selling your product" - then that is a worry. Would like more details around the nature of the original GE agreement, and whether or not there was an option on exclusivity that was not exercised - they spent a lot of money on gearing up their sales force for Trophon.

Yes, I will be interested to listen in to the conference call. It seems quite a departure from their current sales model. The line that suggested that it might be not be so friendly between NAN and GE was:

Through this period of transition with GE Healthcare as a non-exclusive partner, purchases by GE Healthcare from Nanosonics are unlikely to be significant.

[ShareFodder]

Well, it's good to see that the direct sales model was being contemplated more than a year ago for North America. That is, it's not a desperate response to an issue with GE. It will certainly improve margins.

[stoploss]

Hard to know which side is the one to back ....anyway market likes it 160 trading , I'm happy to stay in until the trend reverses .

[skid]

Looks like GE will be continuing as a non exclusive sales agent

Heres the brief

http://www.openbriefing.com/AsxDownload.aspx?pdfUrl=Report%2FComNews%2F2015020 6%2F01596936.pdf

[baller18]

whoa, nan is on fire huh? N think results are due this week as well…

[baller18]

Why sell out when the trend is still so strong? Guess you have your reasons

[stoploss]

$ 1.77 go you good thing

[stoploss]

looks like an insto is using investors money to buy a stake at any price.
some say it will hit$2
jeez I paid 1.18 for it early JAN.
6 monthly due out this week but because they report quarterlies we all know what the 6 monthly will be.

Maybe they are going to announce something else as well ?

[baller18]

Whoa 1.825!!!!

[stoploss]

Whoa 1.825!!!!

I feel a speeding ticket will be on the way shortly ......

[skid]

So this is what it was like (PEB)

[skid]

that was pretty exciting watching the depth for the last few hrs

[baller18]

yep one stupid sheep following another stupid sheep following another stupid sheep following speculation.
At least NAN has sales but it also has a share price 20 x revenue.
Lol, sour grapes...

[skid]

Cmon, Snaps--let us enjoy it:)

[Baa_Baa]

yep one stupid sheep following another stupid sheep following another stupid sheep following speculation. [snip]

You called ...
Baa?


[snip] .. merely having a dig at the herd all jumping in when the results of the next announcement were known a couple of weeks ago. ... [snip]
We're a flock, not a herd!
Time 4me to flock off.
BAA
:eek2:

[disc: not a BaaNAN'er, but looks like fun, enjoy the ride!]

[skid]

Well done Snaps-(bird in the hand)-We'll see what the report says today--some over on hc reckon the changes in the States may result in upgrade (or possibly progress in Japan)

Im going with the flow--Im not a particularly good trader and the fundamentals still seem good.

Entertaining post there Baa Baa:)

[skid]

At one stage yesterday the sell was 161 and the bid was 187--crazy day

[skid]

Looks like they got a speeding ticket--suppose that was expected..

[baller18]

results out! :D

[skid]

http://www.morgans.com.au/Blog/2015/February/Healthcare-update-18-February-2015.aspx

[skid]

http://edition.cnn.com/2015/02/19/health/cre-superbug-explainer/

[baller18]

Y do they money when they have 23 mil in the bank?

[NZSilver]

Mmmm strange? acquisition? taking advantage of the SP?

[stoploss]

Mmmm strange? acquisition? taking advantage of the SP?
It says fundraising , no mention of acquisition . Hopefully an SPP .

[skid]

Biotech Nanosonics is seeking to raise $25 million in a placement through Canaccord Genuity.
Nanosonics shares went into a trading halt on Tuesday morning as its broker contacted potential investors.
The company was looking to place 15.2 million shares at $1.65 each.
The offer was priced at a 7.3 per cent discount to the last close and a 5.9 per cent discount to the 10-day volume weighted average price.
Nanosonics was seeking the funds to support and accelerate direct sales operations in North America, support its marketing efforts through distribution partners in Europe and Asia and ongoing research and development, according to a termsheet sent to potential investors on Tuesday.
Canaccord was seeking bids by 10am on Wednesday.
Nanosonics would resume trading on Thursday.
The company’s biggest institutional shareholders include Allan Gray and New Zealand’s Fisher

[skid]

Dang! no $A acc.--anyway Im assuming we cant do a thing until we get the application in the mail?

Guess until then Ill just keep an eye on the SP to make sure its still a deal.

[skid]

This company is going from strength to strength

http://www.asx.com.au/asxpdf/20150306/pdf/42x3c540k6qkpg.pdf

[ShareFodder]

And the SPP is done, anyone take it up?

[stoploss]

And the SPP is done, anyone take it up?

Not sure if we had to go online for this one , but I haven't got any docs in the mail .........

[skid]

Not sure if we had to go online for this one , but I haven't got any docs in the mail .........

It was online--I gave up as it just got to complicated here in NZ with no acc in OZ--those over there just had to do a quick transfer and fill out the form online.

[ShareFodder]

I got the docs in the mail, BPayed my money the next day but not sure if I scrapped in or not. No refund yet though....

The stock is closing on $2, very hard to know when to pull the plug and take profits on companies like this.

[skid]

Some interesting comments over on hot copper

[NZSilver]

Seems fairly lofty, will be interesting to see how new sales approach goes. I'm out for now @ $2

[baller18]

Downtrend forming here peeps?

[skid]

Its not surprising that its taken a breather--but its still a long way from a downtrend--It has'nt even hit the 50ma which SP often bounce off of in uptrends

[baller18]

Its not surprising that its taken a breather--but its still a long way from a downtrend--It has'nt even hit the 50ma which SP often bounce off of in uptrends
Lets see if it bounces off teh 50ma, becuase it just closed lower than the 50ma as of today

[skid]

Golodman Sach seems to like playing games with this share--watching

[baller18]

WTH man?!!! sighssss

[NZSilver]

Overpriced man - potential yes. but we are talking one product and forced change in sales strategy so a bit to work through

[baller18]

:D back to the uptrend it goes!!!

[skid]

Some were predicting volatility and looks like they got it!--Could be some wild swings ahead

[stoploss]

4C looks ok to me . Still holding ( thanks KW ) , KW what's your take on this ?

http://www.asx.com.au/asxpdf/20150731/pdf/43055v21qf4glk.pdf

[ShareFodder]

A few notes from the conference call:
- Now have 18 staff in US direct sales model
- Installed base around 5,200 units
- probably only sold around 500-700 units in the last qtr, mostly still by GE
- sales process takes 4-9 months so direct sales model will take time, but pipeline building strongly
- Terms of trade about 30-60 days, poor reported cashflow is mostly a timing issue and perhaps GE working through inventory (??)

[Bigane]

I think the 4c was ok. I believe that the capital raising was required when moving to a direct sales model as some procurement departments will look at the financial health of potential vendor before signing a long term supply agreement them.
What I am really holding out for is some info on future applications for the technology. Also hoping that there are some production efficiencies at the new premises that will boost margins further.