Opinions
David Driscoll
Atrion Corp
ATRI-Q
PAST TOP PICK
Jul 02, 2024
$452.880
Stock price when the opinion was issued
Healthcare
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PARTIAL BUY
A small cap medical device company, only US$400 million. They're good at what they do, but it's volatile. Use limit orders. He's owned this since $100/share, and has bought on pullbacks. They have new products in the pipe, but there was a slowdown in the supply chain recently. Dividend is growing by 10-15%. Organic revenue growth around 5%. Start with a half-position with the current toppy market.
Healthcare
TOP PICK
A leading supplier of medical devices to niche markets, like opthamology (i.e. IV tubes with clips). The share price has returned to 2017 levels, but they have new products coming out and elective surgery is coming back so demand will rise. Last week, they announced a 13% dividend increase. Strong free cash flow.
Healthcare
COMMENT
There are 7,000 publicly traded companies in the world, and their firm runs 20 different screens. The most important is free cash flow growth. With that, you can invest in R&D, do acquisitions, pay down debt, buy back shares, or pay a dividend. Atrion has very strong dividend increases. Small company, but really strong free cash flow characteristics.
Healthcare
TOP PICK
no price target
They make medical supplies, like lens cases for contact lenses. Shares plunged this year due to high interest rates, so their customers didn't buy much from them. But when those customers finish working through their existing inventory, they will order from ATRI again. Trades at only 20x PE, and pay s a 2.5% dividend, which rising 10% annually except this year.
Healthcare
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Recently, they announced they were being bought out at $460, which angers him between the stock is worth $600-800. He suspects the aging owners just wanted to retire and get out of the business, so they sold.