CTEC LN

ConvaTec Group PLC

Healthcare


Presented:04/11/2018
Price:£2.02
Cap:$0.00B
Current Price:£2.31
Cap:$7.24B

Presented

Date04/11/2018
Price£2.02
Market Cap$0.00B
Ent Value$0.00B
P/E Ratio33.09x
Book Value£0.58
Div Yield3.06%
Shares O/S0.00M
Ave Daily Vol6,732,684
Short IntN/A

Current

Price£2.31
Market Cap$7.24B
ConvaTec Group Plc is a holding company, which engages in medical business. Its activities include development, manufacture and sales of medical products and technologies related to therapies for the management of chronic conditions, including products used for advanced chronic and acute wound care, ostomy care and management, continence and critical care, and infusion devices used in the treatment of diabetes and other conditions. The company was incorporated in 1978 and is headquartered in Reading, the United Kingdom.

Publicly traded companies mentioned herein: Coloplast A/S (COLOB DC), ConvaTec Group PLC (CTEC LN), General Electric Co (GE), Medtronic PLC (MDT), Smith & Nephew PLC (SNN)

Highlights

The presenter likes the setup and risk/reward for a long position in ConvaTec (CTEC LN; “CTEC") following the 2H 2017 selloff that sent shares from over 340 GBp to 200. He quickly reviewed how CTEC failed to execute on shutting down its Greensboro, NC plant and moving to the Dominican Republic, and then lowered guidance from >4% organic growth to just 1% - 2% for 2018. He expects CTEC to return to a more normal state of operations and growth in 2018, and thinks a 30% total return (to 264 GBp, including dividends) over the next 12 - 24 months is likely. To get there he assumes the stock can trade at 17x his 2020 EPS forecast of $0.21.

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Idea Discussion

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