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ConvaTec Group PLC CTEC

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Stock XLON Rating as of
GBX 226.00 0.00 (0.00%)
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As of Delayed Price Closed

Company Report

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Convatec Offers Strong Finish to Year and Solid Prospects for Further Growth

Debbie S. Wang

Since its initial public offering, Convatec has followed a familiar playbook to press its advantage in advanced wound care and to enhance its ostomy business. By and large, we like Convatec’s businesses that focus on chronic care, which translates into an ongoing stream of revenue. However, the company has lagged significantly behind its key competitor, Coloplast. From our perspective, there is plenty of opportunity for Convatec to remedy the situation, and management has been making notable progress.

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Price vs Fair Value

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CTEC is trading at a 673% premium.
Price
GBX 226.00
Fair Value
GBX 178.00
Uncertainty
Medium
1-Star Price
GBX 663.18
5-Star Price
GBX 949.40
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Convatec's well-established footprint in the U.S. ostomy market has paved the way to forge contracts with large group purchasing organizations, including Premier and Vizient.

Bears

Considering that ostomy patients tend to be brand loyal after the first year postdischarge, we expect Convatec's ostomy business to grow gradually as it takes greater share of new patient discharges.

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Trading Information

Previous Close Price
GBX 226.00
Day Range
GBX 222.40–228.61
52-Week Range
GBX 2.48–295.20
Bid/Ask
GBX 202.00 / GBX 235.00
Market Cap
GBX 462.35 Bil
Volume/Avg
4.2 Mil / 5.1 Mil

Key Statistics

Price/Earnings (Normalized)
18.50
Price/Sales
2.66
Dividend Yield (Trailing)
2.19%
Dividend Yield (Forward)
2.19%
Total Yield
2.19%

Company Profile

Originally spun out of Bristol-Myers Squibb, Convatec designs, manufactures, and markets advanced wound care, ostomy, continence care, and infusion sets for the acute-care hospital and chronic-care home settings. Advanced wound care and ostomy supplies are the largest divisions, accounting for 33% and 29% of total revenue, respectively. Continence care has become a slightly smaller business (21% of revenue) following the decision to exit the acute care market, and infusion sets contribute 17% of consolidated revenue.
Sector
Healthcare
Industry
Medical Instruments & Supplies
Stock Style Box
Mid Core
Total Number of Employees
10,136
Website
https://www.convatecgroup.com

Competitors

Valuation

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Metric
CTEC
COLO B
BDX
Price/Earnings (Normalized)
 18.5039.3618.79
Price/Book Value
 3.5311.932.68
Price/Sales
 2.667.483.53
Price/Cash Flow
 16.9757.3219.04
Price/Earnings
CTEC
COLO B
BDX

Financial Strength

Metric
CTEC
COLO B
BDX
Quick Ratio
 1.210.531.20
Current Ratio
 2.260.851.85
Interest Coverage
 3.448.814.20
Quick Ratio
CTEC
COLO B
BDX

Profitability

Metric
CTEC
COLO B
BDX
Return on Assets (Normalized)
 7.42%11.10%3.65%
Return on Equity (Normalized)
 16.55%35.43%7.60%
Return on Invested Capital (Normalized)
 10.83%15.15%5.30%
Return on Assets
CTEC
COLO B
BDX

Medical Instruments & Supplies Industry Comparables

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1-Day Chart
Name
Price
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
Intuitive Surgical Inc
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DwxjpvmmtKnqtw$29.2 Bil
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