Why I Believe in TSO3 and Q4 Unit Deliveries and Beyond… There was talk from BNN from Peter Imhof discussing how he sold up over 3.00/share as he didn’t like the foresight into units. I believe management got the message on transparency as the stock price dropped into this 2.50 range management responded by scheduling the Myrtle Beach analyst day and open house which I see as a big catalyst into the new year.
If management can reassure institutional shareholders and the analyst community that helps sell their story we could be up in a hurry back over 3.00/share. If sentiment can turn into 2017 in the name individually, TSO3 could outpace the overarching headwinds remaining in the healthcare sector as a whole.
Looking at Q4 deliveries, it can’t be overlooked that this past Q3 was a record for unit delivery and it was specifically mentioned that it was seasonally weak selling season for Getinge which made it even more impressive. I took this as management signaling that they saw much more upside to acceleration of sales and deliveries then was even reported with +5 units QoQ.
Looking at current estimates for 12.2M in Revenue for the full year that computes to aprox. 23 deliveries for Q4 which is just way to low in my opinion. As momentum builds for the product and the economy began to pick up and resulting business confidence and capital spending should follow. If you look for continued momentum and aprox. deliveries around 35 units (+5 QoQ) gets you to a Q4 Rev of 4M and FY16 13.6M (Est. 12.2M). Big Revenue upside and margins and EPS should follow with scale.
It looks like it is finally starting to trade a little better too, with RSI making higher lows and MACD signal line turning higher. As well, if we can get a close above 2.54/share we finally break the short term tax loss selling downtrend from Nov 16.
One of my favourtie names to wrap up 2016 into the short term catalysts into the analyst meeting in the beginning of January.
As an aside, the fundamental intellect on this board regarding the technology and industry is unmatched on stockhouse at times. Congrats all!