Cochlear Limited

Released Nucleus Smart App for Android smartphone users: Cochlear Limited (ASX: COH) has risen 4.80% in three months as on August 01, 2018. The company has recently released the Nucleus Smart App for Android, that offers greater connectivity for people with a Nucleus 7 Sound Processor. With this Nucleus Smart App, the users can now control their hearing from a compatible Android device, and allow them to monitor and adjust their settings, view personalised hearing information and locate missing sound processors. Further, COH has also added a new control feature called ForwardFocus to the Nucleus Smart App, which has user-activated control feature allowing the users to better control their listening environment by reducing the noise level coming from behind them. Moreover, for the first time, the Nucleus 7 Sound Processor is now backward compatible with the Nucleus 24 Series Implant, an earlier generation implant. This means a new group of existing recipients will now be able to choose a Nucleus 7 Sound Processor. The Nucleus 7 Sound Processor for Nucleus 24 Series Implant recipients, Android compatibility with the Nucleus Smart App and ForwardFocus all have regulatory approval in many markets including Australia, the US and Europe. Meanwhile, COH stock is added in S&P/ASX 50 Index, effective from June 18, 2018, but it is trading at a high P/E. Based on the foregoing, we give an “Expensive” recommendation on the stock at the current price of $ 202.880.
 

Impedimed Limited

Fourth quarter 2018 Performance: Impedimed Limited (ASX: IPD), world leader which is engaged in the design and manufacture of medical devices employing bioimpedance spectroscopy (BIS) technologies to be used in the non-invasive clinical assessment and monitoring of tissue composition and fluid status, has fallen 28.57% in three months as on August 01, 2018. IPD for the fourth quarter of 2018 has reported the total revenue of $1.4 million, that includes medical revenue of $1.1 million, of which $0.4 million of revenue has come from the product SOZO. The company has signed $1.9 million of total Contract Value for SOZO during the fourth quarter, which is an increase from $0.9 million in Q3. The contracted Revenue Pipeline has increased to $3.5 million in Q4, up from $2.0 million in Q3. The Annual Recurring Revenue for the SOZO contracts at 30 June is of $1.3 million, up from $0.9 million in Q3. Further, for the fourth quarter, the net operating cash outflow fell to $5.7 million from $6.1 million in Q3. During the quarter, IPD’s cash receipts from customers is of $1.3 million, and cash on hand as of 30 June 2018, is of $31.3 million. Additionally, during the fourth quarter, SOZO abstract has shown more than 87% correlation to CardioMEMS. The company has presented L-Dex data at the American Society of Breast Surgeons meeting, in an abstract presented by Dr Lyndsay Kilgore of the University of Kansas Medical Centre. The company has added two Centres of Excellence. Overall, IPD expects the launch of SOZO and the introduction of the new subscription revenue model, has enabled the company to build a high margin contracted revenue pipeline for strong recurring revenue growth in FY19 and beyond. Meanwhile, IPD’s products are still in the trial and testing phase, therefore, we give a “Speculative Buy” recommendation on the stock at the current price of $ 0.340, while the stock has slumped by 9.3% on August 02, 2018.

 

Revenue Highlights (Source: Company Reports)
 

Virtus Health Limited

Acquired Trianglen Fertility Clinic:Virtus Health Ltd (ASX: VRT), the largest provider of in-vitro fertilisation services in Australia and also the market leader in Ireland, saw its stock falling by 1.4% on August 02, 2018. Recently, VRT has acquired Trianglen Fertility Clinic, which is based in Copenhagen Denmark for a maximum consideration of up to DKK202million (AUD43.0million). Therefore, the maximum consideration paid for the acquisition, which is dependent on Trianglen meeting certain EBITDA targets set out in an earn-out agreement, is $43 million. The acquisition is on a cash free debt free basis of 8.1 times multiple of forecast normalised EBITDA for the FY 18. The initial cash free debt free consideration and adjustment payment will be funded from existing VRT cash and debt resources, with earn out payable in cash and Virtus shares in Q1FY21. It is projected that the acquisition will increase VRT’s earnings per share by FY19. Meanwhile, VRT stock is trading at a reasonable P/E of 15.08x. Based on the foregoing, we give a “Hold” recommendation on the stock at the current price of $ 5.540.

 
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