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Experts
MoneyTalks is Stockhead’s regular drill down into what stocks investors are looking at right now. We’ll tap our extensive list of experts to hear what’s hot, their top picks, and what they’re looking out for.
Today we hear from Salter Brothers director of equities and portfolio manager Gregg Taylor.
Firstly a little bit about Salter Brothers, which is a $3 billion alternative asset manager in Australia. The fund manager concentrates on alternate assets including property and microcap listed companies along with unlisted private equity.
Within equities they have the Salter Brothers Emerging Companies Fund (ASX:SB2).
“It’s one of the larger microcap listed investment funds with ~$100 million specialised in that space,” Taylor said.
“With alternative assets we think the markets are less crowded so there are greater opportunities and less investors looking at them.”
“There are thousands of blue chip investors all looking at the same thing but we believe if you go a bit wider and look at asset classes with less eyes on them there are greater opportunity to make attractive returns.”
Taylor said he is bullish on ASX medtech companies in the small cap space at the moment, particularly in the current market environment where they are not getting a lot of love from investors.
He said Australia has a very strong medtech sector and we are global leaders.
“A lot of investors are risk adverse and focusing on the mainstream defensive assets so I think the current environment creates an exciting opportunity in the medical technology space within small caps,” he said.
“There are some ASX small cap medtech companies achieving great results and are global players but they’re not getting much attention from investors in the current environment.
“There’s significant opportunity for investors with a medium to long-term view.”
EYE (very cool and appropriate ticker code) is tackling two of the biggest diseases leading to blindness in the developed world – glaucoma and macular degeneration.
In late March Nova Eye Medical achieved US FDA clearance for its updated iTrack surgical device to treat glaucoma and now the company has officially launched the treatment in the USA.
The iTrack Advance is the new generation canaloplasty device for canal-based glaucoma surgery. Taylor said EYE is leading the way globally in the treatment of glaucoma with its previous generation iTrack device used extensively worldwide.
“It’s a big significant problem and a multi-billion addressable market,” he said.
“They’ve got the leading medical device to help treat this global problem at scale and that’s why we like them.”
He said EYE has a strong presence in the USA, Germany, throughout Asia, China as well as Australia and New Zealand.
“They’ve developed the product, got the distribution and necessary approvals and they’re selling meaningful numbers of units of iTrack Advance, which is without peer and quite transformational in the treatment of glaucoma,” he said.
Taylor said EYE are an Australian success story of a business forging its way globally and has a market cap of only $50 million which it think presents opportunities.
“They are not discovered or appropriately valued in the Australian market,” he said.
“It is well funded with over $11 million of cash in the bank and for us it ticks all the boxes of a genuine global player, unique intellectual property, advanced global opportunity set and already commercialised.”
Taylor said NUH with a market cap of ~$20 million is a significant player in self-fitting hearing devices and has partnerships with some of the leading companies in the world.
“They have FDA approval in the US, a partnership with HP who white label their technology in their HP self-fitting OTC hearing devices and they’re sold in the mainstream retails outlets of the US,” he said.
“So you think of CVS which is the largest pharmacy group in the US, Best Buys and all the major retailers stock this product as their self-fitting hearing device.
“Nuheara have democratised hearing, which is a global significant addressable market and with their technology they’ve been able to lower the price of self-hearing aids.”
He said they have US FDA approval, are manufacturing thousands of the devices and have partnerships with major distributors in the US market.
“They’ve got a strategic investor called Realtek who owns just on 20% of their company which is a a massive Taiwanese semiconductor company,” he said.
“Nuheara use their semiconductors in their devices and they’ve been helping scale this opportunity.”
With a market cap of ~$130 million MDR has a medication adherence platform and is a major player in the US and Australian markets.
Stockhead’s Tim Boreham describes MDR well. At a simple level, MedAdvisor’s local platform reminds patients (via mobile software application or text) to take their meds.
But the company’s reach has extended to other forms of health communication, such as conveying regulators’ drug warnings and facilitating vaccination campaigns.
In November 2019, MDR inked a deal with logistics company Kings Transport to deliver medication to patients’ homes, with MedAdvisor receiving a cut of the delivery fee.
The company has deals with Chemist Warehouse, Amcal, Guardian, Terry White, Pharmasave and National Pharmacies.
MedAdvisor’s US business is based on the medication communications Adheris, acquired from Syneos Health LLC, in 2020. The year before, the companies entered a joint venture to sell MedAdvisor’s programs to Adheris’s pharmacy base.
“It’s all about digital medication management and decluttering the medical system and enabling scripts to be digitally received and then delivered,” he said.
Taylor said MDR have almost a monopoly with 70% market share in Australia and very significant market share over in the US.
“They’ve got a multi-billion market, they’re a leading player in the US and Australia, had over 100% growth in revenues last year and are a very well capitalised business,” he said.
“They’ve had extraordinary growth in the US market and have potential to be a $500 million company in the next few years.”
Read Dr Boreham’s Crucible: Are MedAdvisor’s US plans about to go to script?
At Stockhead, we tell it like it is. While Nova Eye is a Stockhead advertiser, it did not sponsor this article. Salter Brothers hold positions in these companies.
The views, information, or opinions expressed in the interviews in this article are solely those of the interviewee and do not represent the views of Stockhead. Stockhead does not provide, endorse or otherwise assume responsibility for any financial product advice contained in this article.
Health & Biotech
Health & Biotech
Health & Biotech
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