CRH Medical (CRH Medical Stock Quote, Chart, News: TSX:CRH) has been one of the top performing innovation sector stocks in Canada over the past few years, but one analyst thinks there is more upside to be had.
Brian Pow, Vice President of Research and Equity Analyst, Acumen Capital was on BNN’s Business Day today to talk about his top picks.
Pow says he sees CRH Medical as a compelling rollup strategy stock and thinks its current valuation doesn’t reflect the value of its recent acquisitions. He also likes the fact that the company has a balance sheet strong enough to make acquisitions with minimal share dilution.
“What we like about it is it’s in a pretty simple space, anesthesiology service providers that they are buying up and the anesthesiology services provided to surgical centres that focus on routine endoscopies,” said Pow.
CRH Medical was formed in 2000, but kicked into gear in 2006 when it began to market its lead product, the CRH O’Regan System, a single use, disposable, hemorrhoid treatment, in the US. Co-founder Tony Holler and CFO Richard Bear were no strangers to success, having just sold groundbreaking flu-vaccine maker ID Biomedical to GlaxoSmithKline for $1.7 billion. After luring retail expert Edward Wright from Cartier, the company rejigged its marketing strategy, moving away from a capital intensive retail clinic model towards a strategy in which the company sold through gastroenterologists.