Although stocks are now at 20%, I think this growing company is attractive – Motley Fool UK


When a stock price falls more than 20% in a day, one of two things usually happens. It could be because something has changed to irreparably damage the underlying business, or it could be news that involves a short-term stop

Short-term beats can be decent opportunities to jump to an otherwise healthy growth story and I think it might be what we are seeing today with Consort Medical (LSE: CSRT), whose investors are experiencing a reversal of 20% – more than the share price today on the release of the half-year results.

Temporary challenges?

The company is a contractor and manufacturer of devices for the distribution of drugs and drugs and partners with pharmaceutical companies to design, develop and produce "High performance" medical devices for the administration of inhaled, injectable, nasal and ocular drugs and point-of-care diagnostic products. It also makes active pharmaceutical ingredients (APIs) and finished dose drugs "To the highest quality standards."

First we remove the bad news. Today's report reveals that partner company Mylan has suffered a delay in the approval of his Wixela (generic Advair) inhalation program, which led to its inventory of Consort Medical devices, so Mylan will not buy from Consort in the short term.

The managing director of Consort, Jonathan Glenn, stated that the report expects the situation to break the pre-tax profit for the current year by 3 million pounds compared to the previous director's predictions . To put it in perspective, the company posted a pre-tax profit of just over £ 38 million for the full year to April 2018, so today's news represents a significant loss of earnings, but not catastrophic. Mr Glenn said his "the display of flagship sales opportunities for the product remains unchanged. "

In the meantime, today's figures are pretty good. In the first half of the year of trading, the underlying revenues at constant exchange rates decreased by 0.7% on an annual basis, profit before tax moved slightly more than 6% and profits adjusted by action increased by almost 7%. The outlook is positive and the directors have expressed their confidence in the company's prospects by increasing the dividend on the dividend of 2.2%.

History of intact growth

Despite the challenges of the Wixela program, Consort reported progress in most other operational areas today. The two operating divisions of the company are Bespak, which manages drug delivery devices and delivered 62% of last year's operating profit before special items, and Aesica, which manufactures drugs and represents the remainder 38%. Continental Europe is important to the company and has provided 65% of last year's revenue, 15% comes from the United States, 9% from the United Kingdom and 11% from the rest of the world.

Looking ahead, Jonathan Glenn said that the company's strategy focuses on organic opportunities and will drive research and development "Strong long-term growth". The company also plans to evaluate acquisition opportunities that provide further growth and "A broader offering through access to new geographic markets and complementary technologies and capabilities".

The current weakness of the share price seems to me to be an opportunity. I think the story of growth remains intact and sharing deserves your research time now.

You could really make a million

Of course, choosing the right actions and the strategy to succeed in the stock market is not easy. But you can anticipate the herd by reading the FREE Motley Fool guide, "10 steps to make millions in the market".

The Motley Fool experts show how a seven-digit stock portfolio is within the reach of many ordinary investors in this simple step-by-step guide. Just click here for your free copy.

Kevin Godbold has no position in any of the actions mentioned. Motley Fool UK has no position in any of the actions mentioned. The opinions expressed on the companies mentioned in this article are those of the writer and may therefore differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that taking into consideration a diverse range of insights make us better investors.



Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.