Bill Gunderson

About the Author Bill Gunderson

Bill Gunderson is the CEO and Chief Market Strategist of Gunderson Capital Managment in San Diego, CA. He is also a professional money manager, former research analyst, author of Best Stocks Now, and developer of the Best Stocks Now smartphone app. He offers four free weeks to his weekly Best Stocks Now to Seeking Alpha readers. He also hosts a daily stock market radio show on AM1000 KCEO from 7am-8am. Bill has appeared on the Fox Business Channel and on Bloomberg radio numerous times. He has been published in Barron's, Forbes, and numerous other publications i.e. Los Angeles Business Journal, San Diego Union Tribune, Phoenix Business Journal, Salem News, Rochester Business Journal, and many others.

Not Just Another Ebola Stock

Cantel Medical Corp. (NYSE:CMN) is a global provider of infection prevention and control products and services to the healthcare market. The company is based in Little Falls, New Jersey. Cantel Medical’s business focuses on three product segments:

  • Infection Prevention and Control
  • Purification and Filtration
  • Healthcare Disposables

These product areas have always exhibited strong growth and tend to be economically resilient, but in this day and age of Ebola, this is a company worth a closer look.

Despite the health of the overall market, this stock is breaking out to new highs in part on Ebola concerns. But unlike a lot of other so-called “Ebola plays” out there, this company has the solid fundamentals to back it up.

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Cantel Medical just reported record full year sales and earnings results on September 29th. Cantel Medical exceeded analyst estimates by $0.02 and beat on the top line as well, reporting a sales increase of 15%.

Management’s tone was also very positive about the company’s growth prospects for next year. Cantel Medical is benefiting from prior and ongoing investments in sales and marketing, new product introductions, and recent acquisitions. In July it completed its acquisition of UK company PuriCore International, a leading provider of endoscope reprocessors.

So while the shares of other face mask and hazmat stocks that traders have piled into over the last couple of weeks such as Lakeland Industries (NASDAQ:LAKE) and Alpha Pro Tech (NYSEMKT:APT) are selling off, Cantel Medical is still trading up. In the end, strong fundamentals trump fad investing.

Cantel Medical is small cap medical stock with a market capitalization of $1.6 billion. It receives a risk rating of Aggressive.

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Data from Best Stocks Now app

The stock’s valuation is not cheap, with a trailing PE of 37 and a forward PE of 25 times. The stock’s Value Grade is a B-.

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Data from Best Stocks Now app

Even though Cantel Medical is more of a growth and momentum stock, it is quite defensive given the nature of its business. Regardless of the economy, the health care industry cannot cut back on the sterilization of equipment and other safety measures.

Year-to-date, Cantel Medical stock is up 15% versus only 1.4% for the S&P 500. It has also consistently beat the market over a 1, 3, 5, and 10 year period. The stock rates Momentum Grade of B+ and a Performance Grade of A.

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Data from Best Stocks Now app

Cantel Medical stock ranks #23 out of 3900+ stocks in the Best Stocks Now universe and has a Stock Grade of A-. I am long Cantel Medical in my Aggressive Growth accounts. The stock was actually ranked #1 a year ago, so this is not just another “story stock”.

It seems reasonable that a global pandemic like Ebola could help drive sales of Cantel’s products, but Cantel Medical’s underlying fundamentals have been solid for a while.

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Data from Best Stocks Now app

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