Nanosonics has a long runway for growth
It’s a testing time for investors, with so many hitherto great businesses on their knees, and others looking well over-priced. But it’s still possible to identify structural winners with a long growth runway at reasonable prices. I think one of these could be Sydney-based medical device innovator, Nanosonics (ASX:NAN).
Confronted with a highly uncertain global macro backdrop and a ‘lower for longer’ interest rate outlook, we have strategically positioned our portfolio towards the clear beneficiaries of positive structural trends which are accelerating in a COVID-19 impacted world, such as cloud, e-commerce, digital payments and medical technologies, and away from the most heavily disrupted sectors like old-world media, retail and REITS. In control of their own destiny, we expect these resilient and innovative structural winners to continue exploiting their competitive advantage, taking share from low-tech incumbents, and growing independently of the economic cycle.
Dominic Rose is the Portfolio Manager of the Montgomery Small Companies Fund. Dominic joined Montgomery in August 2019 after spending thirteen years specialising in smaller companies in portfolio management and equities research. Most recently, Dominic was a Portfolio Manager and Senior Research Analyst at MHOR Asset Management in Sydney for three years. Prior to this, he ran Deutsche Bank’s Small Caps Equity Research Team in Sydney for six years. He was also previously Head of Research at Foster Stockbroking.
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John
:
Dominic, I think you a quite right in identifying the regulatory need to keep log as a key feature. I still think (if possible) it would be useful to get some close up experience of this product being used talk to face with the operators and look at the alternative modes of cleaning. I must admit but it does look like a good story.
John
:
Hi Dominic
This analysis is interesting – have you been able to talk to the health care staff that are using this technology? Is there any issues, does it make the job easier etc?
Best John
Dominic Rose
:
Hi John, not directly but feedback from a number of analysts who have regular industry calls has been very positive. Trophon is displacing manual cleaning processes which take more time and are significantly less effective, increasing risks to patients (backed by industry research). In addition to the health and workflow efficiency benefits, Trophon logs all data so hospitals can audit probe disinfection history (who cleaned it, when, how often etc) which is important for safety compliance. Haven’t come across any issues with the product. The key adoption driver seems to be industry guidelines requiring high levels of disinfection. These are in place in the US and ANZ while Europe and Japan appear to heading down that path.
Hope this helps.
Dominic