The human circulatory system is amazing. But it doesn’t always run smoothly. Roughly 3% of the living population suffers from some sort of peripheral vascular disease (PVD), explains Tyler Laundon, editor of Cabot Small-Cap Confidential.
This occurs when there are issues with blood vessels beyond the heart and brain. When prevention, treatment and lifestyle changes aren’t enough, surgery may be required.
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When it is, over 50% of surgeons turn to solutions from LeMaitre Vascular (LMAT), a Massachusetts-based medical device company with a market cap of $710 million.
LeMaitre offers implantable and disposable devices for 15 markets worth nearly $900 million altogether. The company holds either a #1 or #2 market share position in each one.
With a systematic and measured growth strategy management sees potential to keep expanding in the $5 billion market for peripheral vascular solutions.
While there are occasional bumps in the road, LeMaitre’s growth profile is about as steady as you’ll find in a small-cap medical device manufacturer. That’s largely because the company focuses precisely on what vascular surgeons need. It introduces new products through internal R&D and through acquisitions.
LeMaitre has developed 21 products internally to date, with 13 having reached the market (six failed) and two still in development. LeMaitre has also completed 23 acquisitions over 22 years.
The company typically delivers low double-digit revenue growth. Revenue grew by 10%, to $110 million, in 2018 and should expand at about the same rate in 2019.
Adjusted EPS was up 6% to $0.91 in 2018 and will be roughly flat in 2019, in large part due to acquisitions, which often mean transitioning manufacturing to Burlington, Massachusetts, as well as some additional hiring. LeMaitre also pays a small quarterly dividend of $0.085, which works out to a yield of just under 1.0%.
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(Editor's note: Tyler Laundon chose Repligen (RGEN) as his top idea for 2019; the stock rose 75%. He now explains, "Big picture, this pure-play supplier of bioprocessing products for the life sciences market has a lot going for it, not the least of which is technological leadership in niche markets. It's also one of the few small cap players in its market and should continue to attract buyers in 2020.")
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