Tip Update: Buy at 306p
- Tip style
- Risk rating
- LONG TERM
- Our previous tip
- We said BUY at 73.5p on 23 Apr 2015
- Tip performance to date
International expansion has already led to significant growth for disinfectant manufacturer Tristel (TSTL). But while it has successfully rolled out its operations into Europe, Asia and Australia, investors have been awaiting its move into the largest healthcare market in the world, the US.
This morning the group announced that the US Environmental Protection Agency (EPA) had registered Duo, its proprietary foam-based chlorine dioxide product. The decision came ahead of expectations, which foresaw registration in May 2018 followed by state-by-state registration by the financial year of June 2019. As it happens state-by-state registrations are expected by the end of the calendar year, with revenue contributions coming in before the 2018-19 financial year-ends.
The news led to a 10 per cent jump in the share price to 306p, putting the shares at 37 times forecast earnings. While high, this reflects the group’s strong performance thus far and the massive potential in its international expansion. Buy.
Last IC View: Buy, 278p, 20 Feb 2018