Wednesday, December 9, 2009

I Buy Cantel Medical (CMN)

Today I bought an initial bit of Cantel Medical, ticker CMN. This was something of a lightning decision, compared to my usual research and long-term observation before buying a stock. Yesterday, while researching it, I thought the company's focus on infection control was interesting, and I saw that it would report quarter results today. The quarter ending October 31, 2009 results were better than expected. I could have bought it cheaper yesterday, but I think the price is still very attractive today.

Cantel Medical can be thought of as a conglomerate where the separate units each are engaged in some technology or service related to infection control. Its Minntech division makes sterile disposables for dialysis and other medical procedures.

Crosstex provides sterile disposable sundries for dentistry and medical use. Mar Cor Purification makes systems for ultra-pure water for medical use, including for biotechnology research and production. Saf-T-Pak specializes in packaging that is sterile or that is used to transport biohazards.

Cantel Medical reported a particularly good quarter for both revenues and profits, partly due to a surge in demand for masks for flu season. However, while this sweetener will probably back off next quarter, I see a growing demand for infection prevention technologies. With many species and strains of antibiotic-resistant bacteria becoming increasingly common, the best way to protect patients is to use sterile disposables. With the globalization of the economy viral diseases spread very rapidly. Again, the best procedure is to protect people with sterile disposables.

See the Cantel Medical fiscal Q1 2010 results for the press release.

Normally I like to know more about a company before I plunge in, but having bought a small amount of stock, now I will watch Cantel closely and report back in this blog.

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