RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:TSO3 Inc has a 181 per cent upside, says Echelon WealthFor the last time, no one has a crystal ball, so I will never say anyone is wrong because I just don't know. Also, I am not trying to convince anyone of my forecasts. I am just laying out how my thought process behind my estimates, and everyone is free to do whatever they want with that information, and trade the stock accordingly.
@Joey: thank you for all your "due respect", which is nicely shown in your adjectives like "off the rocker", "preposterous", etc.
On Winning % on Quotes:
- This depends a lot of the quality of quotes like Joe mentioned, but also depends on the overall market structure and your product differentiation / preposition
- I know RMD competes against numerous competitors, like Sunrise Medical, Fischer & Paykel, Nellcor, Respironics, Smiths Medical, Teleflex, etc. Hence Joe's 32% winning rate is above his department's average. Imagine if there are only two equal players in your market, how would a 32% winning rate look then? He/she would probably be fired...
Why do I have a 60% Winning Rate?
- The US market has mainly 3 players: JNJ (Fortive soon), Steris and us
- There are 15k installed units, and a 1,500 replacement units every year
- No one gets to quote on every replacement opportunity, only in situations/accounts where they have good connections and/or if their product is appreciated by the buyer. Hence every sterilizer company will have <1,500 quotes a year, but a higher than their "normal share" of winning %
- Getinge's sales reps were seeing a 50% winning rate on their VP4 quotes
- TSO3's winning rate to date is significantly higher than my 60% assumption
- TSO3 has scrubbed all 200+ Getinge orders and found them to have decent quality
- Our product is best-in-class:
- Lowest cost: we are giving attractive discounts vs. market price due to our low priced Getinge inventory
- Lowest operating costs: validated by numerous accounts, and now backed by our guaranteed savings program
- Broadest FDA claims: including the problematic ERCPs
- Most flexible purchasing options: not just the typical capital purchase plan offered by Getinge
- Overall industry context:
- ERCP's contamination cases are now drawing huge settlements from Olympus. The problem has been widely recognized by ECRI, AAMI and FDA. Legal mitigation would be on hospital CEOs' minds
- JNJ is being bought by Fortive, which will bring some disruption in their sales efforts = opportunities for others
We need to "agree to disagree". But here are my final observations:
- 85 units represent 5.7% of the US replacement market share. This is within a market with only 3 players, including us
- If we extrapolate our Q4 results (even with the 2wks X'mas holidays hiatus), we get to 84 units/yr with 5 sales people. Now we have 11 reps, as well as the maturation of the 200+ Getinge quotes coming to us in 2019. So basically you are either saying Q4 was a fluke, or all the new reps and the entire Getinge book are duds
My Parting Advice to Everyone:
Given the current market structure, our product differentiation and industry increasing awareness of VP4, if ANYONE thinks our sales will not ramp in 2019 over 4Q18 results, they should SELL THE STOCK. If you think we are going to be stuck at 5-6% market share, SELL THE STOCK.
There is much better opportunities elsewhere...I remain baffled why anyone would actually buy/hold this stock if this is indeed what they think