Just looking at the market, CSL, COH taking a battering. When a lull comes in the storm the world will realise this sharemarket is all about disinfection. NAN is positioning itself to be knnown as the disinfection brand. The market will eventually see this point. Hold on.
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A manufacturer of medical disinfection equipment, Nanosonics has seen its revenues more than quadruple in the last five years as the company successfully expanded into offshore markets. Operating under a ‘razor-and-blade’ model, it generates a reliable and high-margin revenue stream from the consumables it sells to customers (who are likely to be especially conscious of the need for effective disinfection at present!).
It too generates the lion’s share of revenue from overseas and therefore benefits from a weaker dollar. Importantly, it has zero debt and a whopping $82 million of cash on hand. With a large and growing addressable market, an industry leadership position, and new products about to be released, it seems likely Nanosonics is well placed to be a more profitable business in the years ahead.
One thing to bear in mind is that, despite the recent pull back, the company remains very much on a growth multiple with a PE of 151x. Bulls argue that that’s justified by a very robust growth outlook, but investors should be mindful that the share price could potentially fall a lot further if sentiment continues to deteriorate. The business itself, though, appears rock-solid.'
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