I took a 4% position today for similar reasons.
I really liked that its Operating Leverage (Incremental EBITDA Margin) was over 100%. Which means that for every 1 new dollar of sale they were getting more than 1 dollar to Adjusted EBITDA (QoQ, cause they don’t have a year of data yet). The only other company that I am following that has that and is growing over 30% year over year is Applovin.
Things I like about this company they have no competitors and they have very small market penetration at the moment. Their largest customer U.S. Renal Care has 3% of the market share for dialysis. Small downside is U.S. Renal Care is 80% of their business at the end of Q1. Normally this would be a huge concern with me but on 21st of May at the RBC Capital Markets Global Healthcare Conference, talked about expanding the customer base.
We onboarded, two others, IRC and DCI, late last year, and continue to to increase patient numbers with with both of those providers, and we’re we’re optimistic. As I said, we we have one of the two LDOs under contract, we haven’t disclosed which one.
IRC and DCI are both about half the size of U.S. Renal Care which provides growth potential. But the main growth potential is landing the LDO (Large Dialysis Organization). DaVita Inc or Fresenius Medical Care North America are the LDOs. They both have about 35-40% of the market of Dialysis. Which is 10 times the size of their largest customer at the moment. Larger organizations take time to implement but this could be a large potential for the company.
Another growth potential mentioned was moving into other types of long term catheter. Which was brought up on the 21st of May
I think the threshold set in the study is is lower, right, to meet, statistical significance. I’m hopeful and optimistic that we’re gonna show as good or better result in TPN. At the end of the day, our our view is that a catheter is a catheter
Drew,
Long CRMD