January 31st, 2022 | 11:56 CET
MedTech with billion-dollar potential: Siemens Healthineers, Perimeter Medical Imaging, Sartorius
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At home in Southern Germany, the passionate stock exchange expert has been accompanying the capital markets for about twenty years. With a soft spot for smaller companies, he is constantly on the lookout for exciting investment stories.
Siemens Healthineers: Everything still in butter
MedTech encompasses numerous fields of application: including imaging procedures, minimally invasive medicine, wound care and aesthetic medicine. Siemens Healthineers is strongly positioned in the former area. The imaging expert is the second-largest MedTech company in Germany in terms of sales, behind Fresenius. Although the two largest German companies in the sector are only ranked third and seventh worldwide, German companies score points with their patents. In 2020, Germany ranked second by a wide margin behind the US in the number of patents filed.
Siemens Healthineers is likely to have filed some of these patents. The Erlangen-based Company is working on enabling hospitals to outsource magnetic resonance imaging to external experts who can perform the examinations remotely. To this end, Siemens Healthineers is working with TeamViewer, thus opening up a digital growth area. Last fall, Siemens Healthineers already increased sales by more than 20%. The Company is well-positioned and even pays a dividend. In retrospect, the IPO a few years ago was a success. The stock has come back a bit, but the long-term upward trend remains intact.
Perimeter: Making cancer surgeries unnecessary and patients happy
While stocks like Siemens Healthineers are promising but also a bit boring, investors can get a lot of price fantasy into their portfolios with shares like Perimeter Medical Imaging. The reason is that the Company operates with a promising product in an absolute growth area. Specifically, Perimeter specializes in avoiding second operations as part of cancer treatment. From an economic point of view, this saves costs, spares patients a second operation and reduces the overall risk of negative disease progression. Perimeter has developed imaging techniques using artificial intelligence that can detect during surgery whether the removal of tissue was sufficient or whether there are still tumor cells at the edge of the tissue. If Perimeter's solution indicates possible remaining cells during surgery, the surgeon can remove additional tissue directly, increasing the likelihood that a second surgery appointment will not need to be scheduled.
Until now, tissue has been removed during breast surgery, for example, and sent to pathology. After days, the result comes back. If there are indications that diseased cells have remained in the body, a second surgery appointment quickly becomes necessary. Perimeter can prevent those second appointments. According to Perimeter, the technology has clearance from the US Food and Drug Administration and addresses a USD 3.7 billion market. The stock has lost ground in recent weeks, but this may also be due to the overall market. A bottom could form in the area above EUR 2. Those who want to invest in MedTech companies can take a closer look at the value. The BVMed survey also showed that the sector thrives primarily on small and medium-sized representatives.
Sartorius: Warning signals are increasing
A somewhat larger representative of the industry, but one that has recently come under a bit of pressure, is Sartorius. The Goettingen-based Company has impressed with a flawless upward trend for around ten years. During the pandemic, the upward trend was even steeper. Sartorius deals with laboratory instruments and disposables for drug production and other consumables. Apart from laboratory instruments, this may not sound particularly technologically advanced, but the reality of the pandemic shows us that disposables are indispensable. It is also reflected in the 2021 annual figures: the Company grew 47.7%. More importantly, Sartorius sees good opportunities to grow dynamically in 2022 and beyond.
While the stock is a German classic, it is also already expensive. As with Siemens Healthineers, the trees are unlikely to grow to the sky at Sartorius. The share price has become more volatile in recent months - this is a warning signal after the rise. Perimeter Medical Imaging's share price is also volatile, but this is likely due to its early stage. Since the price has come back, growth-oriented investors can take a closer look at the value.
Conflict of interest
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