Bio-Techne (NASDAQ:TECH) was up about 16% through the end of May. It is one of the world’s largest producers of reagents (which are specialized proteins) used in drug research and development and clinical diagnostics. It’s a strong free cash flow business given the high incremental margin and annuity-like nature of the sales of these consumable products.
Equally important, the CEO has transformed the company in the five years since he came on board, taking a steady cash cow and turning it into a compounding growth machine by reinvesting in previously untapped opportunities such as faster and broader new product development, geographic expansion, salesforce growth, and acquisitions that supplemented its core business or enhanced its presence in the analytical instruments market.
The payoff from these actions has been evident in Bio-Techne’s robust financial results, and the market has rewarded the stock with valuation multiple expansion.
