EKF Diagnostics has been tipped by analyst Dr Mike Mitchell, at new house broker Panmure Gordon.
EKF, a point-of-care, central laboratory and molecular diagnostics business moved to Panmure Gordon from Canacord Genuity on February 2, 2015. In an initiation note, which was typically comprehensive, Dr Mike Mitchell placed a ‘Buy’ recommendation with a price target of 39p on the stock.
In the note, Dr Mitchell wrote: “A strategy to combine M&A with organic growth has allowed EKF management to successfully create a global diagnostics business operating well beyond the
‘traditional’ narrow confines of UK diagnostics companies.
“An experienced management team drives the group, with a model which integrates a major presence in PoC (point of care), Central Lab testing and a significant opportunity in
the growing field of molecular diagnostics. In light of its historic revenue expansion with a compound annual growth rate (CAGR) of 23% from 2011-14 and continued future potential (CAGR 13% 2014 actual-2017 estimated), the current share price offers an excellent opportunity to invest.”
For the full year ending December 31, 2015 Dr Mitchell estimated an adjusted pre-tax loss of £2.4m (2014: £0.8m loss) on revenues of £45.6m (2014: £40.1m).
The writer holds stock in EKF Diagnostics