Shares inANGLE (LSE: AGL) jumped by as much as 6.4% during early trade this morning, after the company reported that it hadsecured the first commercial sales of the groups Parsortix system.
Big market, slow growth
The Parsortix system is the specialistMedTechcompanys flagship product that uses patentedmicro-fluidictechnology to capture and harvest circulating tumour cells from blood. Angle believes that the addressable market for this kind of product could be worth as much as 250m, although the company didnt reveal any details about the customers or the revenue derived from the initial sales reported today. Angle expects revenue from the medical research tool to be initially modest as it grows over time.
City analysts believe that theParsortix system could generate sales of 340,000 for the year to 30 April 2016, which works out at around four-to-five months of sales. Next year, sales are expected to pick up and analysts are predicting Angle will generate revenues of 2.2m for the full-year. However, even though sales of AnglesParsortix system are set to take off over the next 12-to-24 months, analysts expect profit to remain elusive for the time being.
So for now Angle remains a speculative play. Until the company is able to show that it can generate a consistent profit,its sharesarent suitable forrisk-averseinvestors.
Another strong performance
In whats become something of a regular occurrence forAdvanced Medical Solutions (LSE: AMS), the company issued another upbeat trading update today, reporting that itwas on track to meet the markets expectations forrevenue and profitabilityfor full-year 2015.
Whats more, Advanced Medical said today that the regulatory approvalsreceived this year for its new antimicrobial foams, together with the clearance to market its sutures in the US, are expected to contribute to growth in 2016.
Commenting on todays trading update, Chris Meredith, CEOof AMS, said:
The Group continues to deliver strong organic growth supported by a pipeline of new products coming out of our Research and Development teams. We are confident that AMS is very well positioned to deliver further growth.
If youre looking for an investment to revolutionise your portfolios returns, Advanced Medical could be an excellent choice. The company has consistently outperformed since 2009. Net profit has grown at a compound annual rate (CAGR) of 36% since 2009, and reported earnings per share have expanded at a CAGR of 27.7%. Over the sameperiod,the companys shares have gained 450%, outperforming every major stock index by several hundred percentage points.
That said, Advanced Medicals shares dont come cheap. Theyre currently trading at a forward P/E of 26.9, falling to 25.3 for 2016 and support a dividend yield of 0.4%. Still, sometimes its worth paying extra for quality.
The bottom line
Based on my analysis, Advanced Medical looks attractive after todays update, but risk-adverse investors should avoidAngle.
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