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Abano Healthcare Approved by HHG Investment Committee as Peripheral Stock

Abano were recently approved by the Hamilton Hindin Greene Investment Committee for inclusion in portfolios as a peripheral stock (please discuss the appropriateness with your adviser).

Their inclusion was on the back of another positive result on the 25th of July. They’ve shown consistent growth over the past 6 years, still have opportunities in a relatively fragmented market, have a strong balance sheet, and are trading at attractive fundamentals (16.5x earnings). 

The two analysts who cover the company are keen on the stock with valuations of $10.50 and $9.80 respectively (currently trading at approximately $9). 

Abano are a growth by acquisition dentistry business that runs the brand Lumino in NZ (15% market share), and Maven in Australia (2% market share).
 
Abano offer a growth focus in the relatively defensive healthcare sector. The company has refocused on their core Dental business after exiting radiology recently. Abano ‘s Australasian dental acquisition strategy is expected to deliver further earnings growth, with scale benefits to be realised over the medium-term. Abano trades at a discount to its Australian dental peers at 16.5x earnings (1300 Smiles trades at 20.5x & Pacific Smiles Group 21x). The dividend yield is also reasonable for a business growing earnings at more than 10%p.a. (5.4%p.a. vs. 1300 Smiles at 3.68% & Pacific Smiles Group 4.14%). 
 
All in all, they’re in a defensive industry, have a good history, and a strong strategy of buying businesses at attractive prices and bundling them within the business for scale.  


Disclaimer: Hamilton Hindin Greene did not take into account the investment objectives, financial situation or particular needs of any particular person in the preparation of this publication. Accordingly, before making any investment decision Hamilton Hindin Greene recommends that you seek professional assistance from your investment adviser.

This is general information only. For personalised investment advice please contact your investment adviser on 0800 104050

This publication may not be reproduced or further distributed or published without the express prior approval of Hamilton Hindin Greene Limited. While this publication is based on information from sources which Hamilton Hindin Greene considers reliable, its accuracy and completeness cannot be guaranteed. Hamilton Hindin Greene, its directors and employees, do not accept liability for the results of any actions taken or not taken upon the basis of information in this publication, or for any negligent mis-statements, errors or omissions. Some information included in this publication is of an historical nature and may have been superseded. Historical performance does not guarantee future performance. Those acting upon information and recommendations do so entirely at their own risk. Hamilton Hindin Greene’s directors and employees may, from time to time, have a financial interest in respect of some or all of the matters discussed. 

 

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