Personally, I’m more excited about Pro Medicus Limited (ASX: PME), a healthcare-focused software engineering company that sells Picture Archive Communication Systems (PACS) and Radiology Information Systems (RIS). Director Roderick Lyle bought over $15,000 worth of shares at the end of 2012, and in April this year, chairman Peter Kempen bought about $25,000 worth. CEO Sam Hupert bough $28,000 worth less than two months ago, albeit at slightly below today’s prices.
One of the main reasons I like the company is that 80% of its revenues are recurring in nature. Also, the PACS system is perfect for an environment where medical image file sizes are continually increasing, because it allows physicians to view the images without downloading them to their particular device. The company already pays a dividend and can afford to keep paying that dividend as it has over $15 million in cash. Finally, cashflow is considerably stronger than actual earnings, due to significant amortisation.
However, there are significant risks because the company faces deep-pocketed competitors
like Siemens, General Electric, Phillips, and McKesson Corporation. Furthermore, governments often try to restrict diagnostic imaging because it is expensive (and they want to reduce public health expenditure). Of course, this often backfires because it can delay treatment where it is required. Do recall that the company is priced for growth. http://www.**promotion blocked**.au/2014/07/05/3-compelling-growth-stocks-that-directors-are-buying/
PME Price at posting:
95.0¢ Sentiment: None Disclosure: Not Held
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