I like what you write about the business. But how can you buy a stock without any look at the financials ? I am going to check it for this company and come back to you.
Hey Charles, thanks for the comment! I looked at the financials and liked what I saw, for example EBITDA margin increases, expecting to reach guidance even with plant investments in Italy and the U.S.. Another interesting thing to note is that even though Covid-19 related revenue decreased, revenue overall increased healthily.
All this to say that none of what I saw was frightening compared to their peers. As another example debt to equity for STVN is at 26%, whereas for some of their biggest competitors like BD, it is over 60%. Depending on how you look at it STVN could be even more aggressive in their investments and expansion. As they've noted themselves, they have been in biologics and GLP-1s for quite some time, so they are very competitive in that niche.
But more importantly, the opportunity for the stock lies in the fact that we have a megatrend just getting off the ground, for which they are very well poised to take advantage of. In this situation where we have a secular trend forming, I don't think financials is the most important point of analysis, but you raise a good point: I could have included more of my analysis and thoughts about financials in the write-up.
This was so in-depth, I loved the analysis! I was looking at suppliers like Stevanato and I was wondering, where did you find the information about STVN supplying Ypsomed? Like what was the source? Again, this was really great, thanks so much!
Hi Ishan! Thanks for the comment, it means a lot! This is a bit of deduction, the medical device industry is not very open about which components come from where.
Consider the following: Ypsomed are making autoinjectors but they do not make any of the glass components or syringes for the system, instead they do the engineering and make the autoinjector (with the plastics, the plunger, spring etc). You can look at this article from Reuters for some of the info on contracted suppliers:
The biggest competitor of STVN on pre-filled systems is Becton Dickinson, which is not mentioned anywhere as suppliers to any GLP-1 current products (BD also makes their own Autoinjectors so it makes sense for Ypsomed not to tap them). There is however some convoluted structures to be mindful of such as https://www.nemera.net/wp-content/uploads/2021/06/Alira-Health-MassMedic-Drug-Delivery-Systems-Industry-Outlook-March-2021.pdf where Owen Mumford is mentioned this by proxy means STVN, as they have an exclusive contract to make the Aidaptus autoinjector.
Since there isn't a source mentioning the direct relationship I have changed the text to reflect that. Thanks for pointing it out. Again, thanks for the comment!
I like what you write about the business. But how can you buy a stock without any look at the financials ? I am going to check it for this company and come back to you.
Hey Charles, thanks for the comment! I looked at the financials and liked what I saw, for example EBITDA margin increases, expecting to reach guidance even with plant investments in Italy and the U.S.. Another interesting thing to note is that even though Covid-19 related revenue decreased, revenue overall increased healthily.
All this to say that none of what I saw was frightening compared to their peers. As another example debt to equity for STVN is at 26%, whereas for some of their biggest competitors like BD, it is over 60%. Depending on how you look at it STVN could be even more aggressive in their investments and expansion. As they've noted themselves, they have been in biologics and GLP-1s for quite some time, so they are very competitive in that niche.
But more importantly, the opportunity for the stock lies in the fact that we have a megatrend just getting off the ground, for which they are very well poised to take advantage of. In this situation where we have a secular trend forming, I don't think financials is the most important point of analysis, but you raise a good point: I could have included more of my analysis and thoughts about financials in the write-up.
This was so in-depth, I loved the analysis! I was looking at suppliers like Stevanato and I was wondering, where did you find the information about STVN supplying Ypsomed? Like what was the source? Again, this was really great, thanks so much!
Hi Ishan! Thanks for the comment, it means a lot! This is a bit of deduction, the medical device industry is not very open about which components come from where.
Consider the following: Ypsomed are making autoinjectors but they do not make any of the glass components or syringes for the system, instead they do the engineering and make the autoinjector (with the plastics, the plunger, spring etc). You can look at this article from Reuters for some of the info on contracted suppliers:
https://www.marketscreener.com/quote/stock/NOVO-NORDISK-A-S-1412980/news/How-Novo-Nordisk-makes-its-weight-loss-drug-Wegovy-45208398/
The biggest competitor of STVN on pre-filled systems is Becton Dickinson, which is not mentioned anywhere as suppliers to any GLP-1 current products (BD also makes their own Autoinjectors so it makes sense for Ypsomed not to tap them). There is however some convoluted structures to be mindful of such as https://www.nemera.net/wp-content/uploads/2021/06/Alira-Health-MassMedic-Drug-Delivery-Systems-Industry-Outlook-March-2021.pdf where Owen Mumford is mentioned this by proxy means STVN, as they have an exclusive contract to make the Aidaptus autoinjector.
STVN also has subsidiaries involved in the manufacturing, so for example any time you read that Ompi is part of a design or similar, that is also STVN. The F-1 filing by STVN had some good insight on the org. structure. https://www.sec.gov/Archives/edgar/data/1849853/000119312521194281/d87447df1.htm
Since there isn't a source mentioning the direct relationship I have changed the text to reflect that. Thanks for pointing it out. Again, thanks for the comment!
Thanks Michael!