Judges Scientific - Capital Network: Unique Player in Scientific Diagnostics
Published: 23:04 10 May 2017 AEST
Judges Scientific (JDG.LON) stands out as a unique player of consolidating scientific instruments market. With its extensive acquisitive history over the past 10 years and combined expertise of highly experienced management teams at both the parent and subsidiaries, the long-term growth outlook for the company appears intact despite the sluggish performance over the recent short-term.
Executive summary
Compared to the past trends, Judges Scientific shares are currently trading in line with its 3-year/5-year historical average multiples: P/E 15x, P/S 1.5x, EV/EBITDA 10x. Despite continued business expansion via new acquisitions, valuation multiples have contracted after peaking in early 2014 as both topline growth and margin have declined driven by poorer performance of subsidiaries. While such multiple contraction over the recent years can be well justified by slowed market demands, Judges shares have outperformed its industry peers during the past 5-10 years largely attributable to its niche market positioning, in our view.
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