'Compumedics stands out amongst its listed peers in Australia,...

'Compumedics stands out amongst its listed peers in Australia, in terms of a value investment proposition, based on the growth prospects of the company’s core sleep and neurological and ultrasonic blood flow diagnostics businesses. From a substantive revenue base (circa $37 million), relative to our peers, the company is expecting revenues to grow at around the 10% pa over the coming years. More importantly the company will continue to generate earnings and earnings growth from those revenues, with EBITDA anticipated to grow to 15% or more of revenues over the coming years.'

'This, without wanting to be biased or disparative, is in the main superior to any peer entities listed on the ASX, such as Medical Products Development, Promedicus Impedimed or SomnoMed to name a few, all of which have substantially higher PE multipliers and market capitalisations than Compumedics. When you consider the further up-side offered by Compumedics through its already announced next generation growth opportunities with MEG within the company’s neurology business and Somfit, a consumer sleep monitoring application, the disconnect on market valuation appears to present an extraordinary opportunity moving forward.'

'In the U.S. Compumedics holds 3rd market share position, with a great opportunity to grow that further with the introduction of the company’s new suite of lower cost sleep and neurological products to compliment the company’s existing product range. These new low cost devices will enable Compumedics to participate in the entire sleep and neurological diagnostic markets in the US, as opposed to the top 30% or so of the market, which has traditionally been where the company has focused.'

'Importantly we have recently announced an opportunity to expand the business into the much larger MEG imaging market. This is a watershed moment transitioning the company from mainly selling $30,000 software packages to $4 million to $6 million world leading brain functional MEG systems.'

'We expect our recently announced deal with KRISS and its MEG technology that will see our initial sales booked to account by this time next year, to have an extraordinarily positive impact on our business model. A growing pipeline of 10 potential sales demonstrates a strong kick-off in only about 30 days since commercial activation. I would also expect our eHealth Cloud-based platform for professionals to be contributing to revenues and earnings, with $10 million in contracts thus far. Additionally, our new consumer sleep device Somfit is gaining strong traction with mobile wearable consumer expert leaders so we expect this product to be hitting the market next year.'