Growth Focus: Medical Developments International Ltd (MVP)

by Patrick Taylor

Date of Data Capture: 28/10/2017


Classification: Healthcare & Pharmaceuticals

Current Price: $5.92

Market Capitalisation: $350M

Forecast EBITDA Growth: 23.41%

Yield Estimate: 1.06%

Consensus Price Target: $6.90

# Covering Analysts: 3

Discount at Current Price: 16.55%

Price Target Trend: Increasing-Flat

Signal Timeframe: Quarterly-Monthly-Daily

Trend Bias: Up-Flat / Long-Medium

Short-term: Positive
Medium-term: Positive/Neutral
Long-term: Positive

Recommendation: Buy

Set up Notes:
• After rising 550% from 2015 into early 2016, MVP then pulled back 35% to reach $4.25 by late 2016 - pricing formed a base range between $4.50 and $5.50 throughout most of 2017 until breaking above $5.50 resistance in the last two weeks.
• Fundamentally strong in previous years MVP had softer 2017 growth, but we see performance improving again here with aggressive forecasts supported by very strong growth expectations across sales, margins, earnings and profits.
• Technically exciting they are moving out of an 18-month consolidation and should chase old resistance targets at $6.50 and $7.00 before opening up, and we see good support layered down from $5.50, $5.00 and $4.50 if needed.

Growth Focus: Medical Developments International Ltd.

Our primary focus here is capital gain, we will select our stocks from the ASX top 500 All Ordinaries Index.

Normally when the MVP leads the field to the sound of a successful whistle it has nothing to do with Methoxyflurane… But thankfully for us, this time it does as we look to follow Medical Developments International Ltd (MVP) as they move past recently broken resistance and look to chase old highs on renewed strength and excellent potential for further gains.

Founded in Victoria 1971, MVP is a leading emergency medicine solutions company that manufactures and distributes pharmaceutical drugs along with medical and veterinary equipment. The company is best known for its well-regarded analgesia product Penthrox aka the ‘Green Whistle’ which is non-opioid, non-addictive and is easily inhaled to give strong and fast acting pain relief.

With Penthrox sales continuing to grow rapidly into an expanding market we expect this product to remain the main driver of growth - a good example of this was seen in September when Penthrox was recommended for all UK ambulances and again in October when the green whistle was approved for use in Mexico. To put this in perspective; Penthrox received regulatory approvals from 1 country in 2015, 3 countries in 2016 and has approvals pending for 22 countries within 2017. A further 15 countries are set for approval in 2018 and with major approvals pending for the USA and Russia in 2020, and China and Asia by 2021 their future is clearly mapped out.

Listing in early 2004 MVP saw an initial boom before eventually retreating under the weight of the GFC to remerge with the market in 2009 and rallying nearly 1000% by 2013, before consolidating those gains down by over 50% by late 2014. The start of 2015 sparked a rally of more than 500% by May 2016 and then a steady 9 month dip to support for most of 2017 until that broke 2 weeks ago. With that initial push pulling back from resistance we have been waiting for fresh positivity and we have that here as signalling turns positive across all of our key timeframes with excellent momentum building here.

As market size is set to increase rapidly we are given further confidence by the Chairman, Mr David Williams who stated this month: “we have a scalable solution and the depth to quadruple the business and quadruple it again.” And it is from this foundation of strong organic growth that we expect the company to move strongly forward. It is rare to find such a good combination of fundamental performance and forecasting coupled with such broad-based and positive signalling – accordingly we believe it’s time to take part in MVP before the whistle blows.


This report was produced by Taylor Securities Pty Ltd, which is a Corporate Authorised Representative (Number 414063) of Bespoke Portfolio Pty Ltd (AFSL 341991). Taylor Securities and Patrick Taylor (Representative number 414064) have made every effort to ensure that the information and material contained in this report is accurate and correct and has been obtained from reliable sources. However, no representation is made about the accuracy or completeness of the information and material and it should not be relied upon as a substitute for the exercise of independent judgment. Except to the extent required by law, Taylor Securities and Patrick Taylor does not accept any liability, including negligence, for any loss or damage arising from the use of, or reliance on, the material contained in this report. This report is for information purposes only and is not intended as an offer or solicitation with respect to the sale or purchase of any securities or financial products. The securities or financial products recommended by Taylor Securities and Patrick Taylor carry no guarantee with respect to return of capital or the market value of those securities or financial products. There are general risks associated with any investment in securities or financial products. Investors should be aware that these risks might result in loss of income and capital invested. Neither Taylor Securities and Patrick Taylor nor any of its associates guarantees the repayment of capital. WARNING: This report is intended to provide general financial product advice only. It has been prepared without having regarded to or taking into account any particular investor’s objectives, financial situation and/or needs. Accordingly, no recipients should rely on any recommendation (whether express or implied) contained in this document without obtaining specific advice from their advisers. All investors should therefore consider the appropriateness of the advice, in light of their own objectives, financial situation and/or needs, before acting on the advice. Where applicable, investors should obtain a copy of and consider the product disclosure statement for that product (if any) before making any decision.

Subscribe to our Daily Newsletter?

Would you like to receive our daily news to your inbox?