Opinions
David Driscoll
Carl Zeiss Meditec
AFX-O
TOP PICK
Jul 02, 2024
Stock price when the opinion was issued
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All his past picks on this date were small-caps and chosen, based on him expecting US interest rates to fall. All were turnaround plays. He used dollar-cost averaging. AFX peaked in March 2024, fell in July and since up slightly. Is turning around now. Fell because Chinese sales weakened, but that is recovering now. Is buying more.
Lenses for glasses and for surgeons doing operations. Up 20% off bottom because earnings have met expectations. Growth will still be reserved because of sales to China, though starting to turn around a bit. Dollar-cost average this one.
Healthcare sector is a big underperformer this year, due to what's going on in the US. If hospitals don't have the funds to buy equipment, that segment will suffer. Small caps globally are suffering, especially with fears of inflation. Will probably flatline for a bit.
They make lenses for microscopes used by surgeons, and mirrors for ASML. Share are down from 150 Euros due to slowing sales in China and North America. They also make laser surgery equipment. But it's an asset-lite company with tons of cash. It trades at 13x PE 2026. If interest rate decline, they will benefit.