Cantel Medical Corp. (CMN) sells infection prevention and control (IP&C) products in the health care market. The company’s product portfolio includes specialized devices that clean endoscopes used in colonoscopies, water purification systems used by dialysis clinics, and disposable medical products used by the dental industry. Government and industry focus on IP&C is a tailwind and Cantel is the market leader in every major category where they operate.
Cantel has posted strong and consistent financial performance for a decade, driven by new product development, sales and marketing investments, and strategic acquisitions. For the last 5 years, sales have grown 14% per year and earnings 20%, and about 75% of revenues are recurring. Cantel has successfully increased their investment in sales and marketing by developing a dedicated sales and service organization which is a key differentiator. Now they are accelerating investments into international markets, both in Europe, where the company is underrepresented, and in China, where there is an emerging concern about infection prevention and control. There are numerous new products and technologies that the company is rolling out in each of its business segments. And we believe the company will continue to successfully supplement organic growth with strategic and accretive acquisitions.
We believe that Cantel is a terrific, well-managed growth company that has a positive track record of success. We think the management team can achieve its aspirational goal of doubling revenues and earnings in the next two years, which means the stock will perform nicely over time as the business continues to grow.
