LONDON, May 30, 2013 /PRNewswire/ --
Edison Investment Research, a leading international investment research firm, announces the initiation of coverage of Stratec, a German company that designs and manufactures sophisticated automated instruments and software, for global companies like DiaSorin, Abbott and Siemens.
Edison has just published a comprehensive report examining the investment merits of Stratec. The company, based in the Black Forrest, is rooted in long-term relationships (68.6% of 2012 revenues were from four global customers), enabling it to grow its profits over 10-15-year product life cycles. It has an installed base of c 12,000 systems generating service part revenues. Total sales have grown at an average of 20% per year since the 1998 IPO. Stratec is seeking a further new contact in 2013, which, will require significant extra capacity if signed. Stratec aims to develop its share of clinical molecular diagnostics as this developing market segment expands.
In the report, Swabian Strategy, analyst Dr John Savin, argues that Stratec's innovation and deep understanding of its clients' needs and diagnostic chemistries has powered its success. Development staff are about half of personnel costs. The new, expanding, molecular diagnostics market needs reliable, automated systems like the Hologics Panther, approved in 2012 by the FDA and designed and built by Stratec. New technologies like Quanterix's SiMoA digital diagnostics, built by Stratec and partnered with bioMérieux, will start research sales in 2013 and could reshape key sectors of the industry from 2014.
If there are no further deals in 2013, Edison values Stratec on a 2014 prospective multiple of 25x, indicating €39.79/share including dividends of €0.5 per year. If a further deal is signed as expected, the multiple might rise to 35x indicating €55.25/share at a 12.5% discount rate.
For the full report see: http://www.edisoninvestmentresearch.com/research/company/stratec-biomedical
The launch of coverage on Stratec Biomedical is part of a programme of research initiations on healthcare companies exposed to global market opportunities. Edison provides detailed research coverage on more than 180 healthcare companies in Europe, North America and Australia. Its healthcare team has a range of coverage across small-, mid- and large-cap companies active in pharmaceutical and healthcare subsectors, allowing a complete understanding of the entire industry. All reports published by Edison are available to download free of charge from its website http://www.edisongroup.com.
About Edison Investment Research
Edison, the investment intelligence firm, is the future of investor interaction with corporates. Our team of over 100 analysts and investment professionals works with leading companies, fund managers and investment banks worldwide to support its capital markets activity. We provide services to more than 400 retained corporate and investor clients from our offices in London, New York, Berlin, Sydney and Wellington. Edison is authorised and regulated by the Financial Services Authority (http://www.fsa.gov.uk/register/firmBasicDetails.do?sid=181584).
Edison is not an adviser or broker-dealer and does not provide investment advice. Edison's reports are not solicitations to buy or sell any securities.
All published Edison reports are available to download free of charge from its website http://www.edisongroup.com.
Stratec was founded in 1979 as a typical "Mittelstand" engineering business. It built its first medical systems in 1987. Stratec is professionally managed by a stable senior team. Its headquarters and main development centre is in the Black Forest near Karlsruhe in Germany. The ethos is of a solid, conservative business pursuing a differentiated focus strategy. Three cautious acquisitions have been made in software, molecular diagnostics and optics. A Swiss manufacturing subsidiary has been developed. Stratec listed on the Deutsche Börse in 1998. The founding Leistner family retains 42%. Stratec has €66m of revenue reserves with €28m of equity.
For more information on Stratec please contact:
Dr John Savin
Edison Investment Research
SOURCE Edison Investment Research