PROTECH HOME MEDICAL HIGHLIGHTED BY MM FUND MANAGER
Credit: ED SOLLBACH, Portfolio Manager at Spartan Fund Management for his quoted contribution to this news article.
“There are decades where nothing happens; and there are weeks where decades happen.” – Vladimir Lenin
"The last few weeks have seen everyone’s world turned upside down. We now have fears, and live in a reality that we only experienced in movies.
The world has changed in unimaginable ways in just a few weeks. Half of the world is shut down in order to minimize human transmission of the COVID-19 virus. Markets are understandably concerned as to how companies will survive if their revenue drops 90 or 100%.
In January, we watched as the new coronavirus devastated Wuhan in China, and caused China to shut down the whole country during Chinese New Year, the most important holiday of the year, and the busiest travel week of the year.
We were horrified as we realized Western countries were not stockpiling personal protective equipment (PPE), and taking the necessary precautions as South Korea, Taiwan, and Singapore did.
The investment team responsible for Spartan’s MM Fund has transformed our portfolio aggressively in the last two months to position the Fund for what they believe are both near-term and medium-term opportunities. The fund now has four categories of investments:
█ companies that we believe can benefit from the worldwide effort to mitigate the virus,
█ companies that could thrive in the "new normal" with continued social distancing, and
It is critical to position the portfolio for the sequencing that will happen as the economy opens up.
We are focusing on companies that we believe can thrive in a “new normal” of social distancing, record low interest rates, Quantitative Easing (money printing) and limited air travel," explained Sollbach.
Mr. Sollbach then went on to list Protech Home Medical as an example of a company that is benefiting from increased demand for our services because of the virus. Sollbach also mentioned, "The Fund" currently holds positions in Protech (TSXV: PTQ)
"Protech delivers home medical equipment in 11 U.S. states. The company is more diversified than Viemed, as 17% of revenue is from home ventilators, 23% is from oxygen therapy, 21% is from positive airway pressure (PAP) therapy, 19% is from sleep therapy, 11% is from home medical equipment, and 8% of revenue is mobility equipment. Recurring revenue comprises 68% of revenue, versus 32% from one-time sales. Revenue at Protech is expected to grow 19% annually for the next two years, and earnings are expected to grow to US$0.11 in 2021," advised Mr. Sollbach.
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