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In today’s daily we have covered stock research on Simavita (BUY).
The S&P 500 was down by 18.35 points or 0.88% on Tuesday and closed at 2067.89 points. U.S. stocks ended near their session lows on Tuesday, in a retreat from the previous session's sharp rally, but the S&P 500 and the Nasdaq Composite posted their ninth consecutive quarter of gains. First-quarter earnings for companies in the S&P 500 are expected to fall 4.7% from a year ago, according to FactSet. At the same time, economic reports continue to show that consumers aren’t spending the extra money they are saving from lower oil prices.
Etsy, an online marketplace for homemade and craft items based in Brooklyn, plans to raise as much as $306m in an initial public offering. The company, which has so far relied on venture capital for funding, will sell shares for between $14 and $16 each, according to a company filing with the Securities and Exchange Commission. Charter Communications has agreed to buy US cable company Bright House Networks for $10.4bn.
Charter Communications Daily Chart (Source - Thomson Reuters)
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Stock Of The Day - Simavita (BUY)
Simavita Limited (SVA), the incontinence-monitoring medical device maker, has been the frontrunner to have a growth strategy directed towards expansion in the aged-care industry. Incontinence has been reported to affect about 70% of all aged-care residents. SVA has made efforts to provide solutions to deal with aforesaid problem in the digital healthcare sector.
SIM® 72 Hour Bladder Chart (Source – Company Reports)
The Company has come up with various types of electronic diapers for managing the condition. SVA’s technology thus proffers an important solution for improving lives and help ease chronic labor shortages in aged care. The first product by the Company, namely, Smart Incontinent Management solution (SIM®) platform technology, is a wireless sensor technology to deliver evidence-based instrument incontinence data on individuals.
Residential Aged Care_The First Market for Simavita (Source – Company Reports)
SVA reported 23% improvement in earnings results as compared to its previous corresponding period, although, the result entailed a net comprehensive loss after tax of $4.07 million for the half-year ended 31 December 2014. There has been a 203% rise in revenue, which has been of the order of $306,799, as compared to the previous corresponding year. This mostly emanates from the first sale of SIM®, particularly, in the US. The Company also reported for cash balance of $4.93 million at the end of the period. The Company also confirmed in February 2015 about the receipt of $1,370,468 under the Australian Government’s Research and Development Tax Incentive Scheme. As at 18 March 2015, the market capitalization of SVA is $32.3 million.
The Company lately updated about expanding the roll out of SIM® and executing more agreements with leading aged-care providers across the globe. SVA is able to generate revenue from the sale of SIM® on three continents with significant pilot programs proceeding well in US, Denmark, Canada and Sweden. In Australia, the Company reported that the Arcare group has implemented SIM® into 19 of its 24 sites and remaining sites will be rolled out by June 2015. Similarly, McKenzie Aged Care Group has agreed to deploy the technology at all the facilities; and Queensland Rehabilitation Services has also agreed to roll out SIM® across all five of its sites. From said customers, the Company expects to have a minimum aggregate value of the contracts to be in the order of $800,000 per annum.
The Company also updated about collaborative work between Medline and SVA in the US. With pilot programs such as the one being progressing with a long term care provider in the US having over 80 sites are shaping up well. The Medline and SVA team is doing well with the six new additional pilots. Another positive is about the agreement by a long term care facility based in Illinois to start a 90-day study of the SIM® technology in partnership with Medline.
Quarterly Revenue (Source – Company Reports)
The Company has been able to satisfy requisite regulatory standards for distribution in Canada. Further, the Company stated that a 14 facility group in Ontario has established a showcase pilot of the SIM® technology in a 231 bed facility, and the same is expected to be concluded in April. The Company expects to have minimum aggregate value of a potential agreement with the group in the order of AUD$450,000 per annum. In Europe, first customers in Denmark have been ordering SIM® technology and discussion for the supply of the technology to various target customers is in progress. The pilot program with Sanicare Sweden has also been planned to commence in May. First orders are believed to be received during the June quarter. The key appointments to the management team for sales of the SIM® technology are other points indicative of progress in right direction.
Potential Target Markets (Source – Company Reports)
The recent update by the Company entails securities (Company’s CHESS Depository Interests) to be placed in Trading Halt Session State pending the release of an announcement by the Company. This may remain as such until the earlier of the commencement of normal trading on Wednesday, 1 April 2015 or when the announcement is released to the market. Overall and given the sales in Europe and expanding customer base in the US and Australia, the sales revenue for FY15 is expected to grow. The growing footprint across the globe seems to enable SVA to have a good momentum in 2H of FY15 as well.
Based on the foregoing, we put a BUY recommendation for this stock at the current price of $0.50.
Level 13 167 Macquarie Street
Sydney NSW 2000 Australia
E-Mail - [email protected]
Phone - 02 8667 3147
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