I think this AIM stock might clean up in a bear market

first_imgSimply click below to discover how you can take advantage of this. Image source: Getty Images. Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Tristel (LSE: TSTL) manufactures infection prevention and contamination control products. Hospital and veterinary staff disinfect medical instruments and surfaces with Tristel’s formulations. Critical manufacturing environments, like clean rooms, control microbial contamination with Tristel’s offerings.The active ingredient of the majority products is a proprietary formulation of chlorine dioxide. Other disinfectant agents make up just 14% of product revenues.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…Chlorine dioxide’s use in the water treatment industry is longstanding. Tristel is, however, the only company worldwide to use chlorine dioxide chemistry for the disinfection of medical instruments. Chlorine dioxide is less corrosive than other disinfectants but has a higher capacity to destroy microorganisms, including the coronavirus.Cleaning upThe global infection control market grows at around 1% on average each year. Tristel’s revenues have grown annually by 14% on average, showing that significant market share has been captured, which is consistent with the claim that chlorine dioxide is a superior disinfectant agent.There is every indication that revenue growth will continue. Tristel is waiting for more product approvals in China. In France, Tristel is one of only three entities whose products meet new regulatory requirements for the disinfection of invasive ultrasound probes and stands to gain substantial revenue increases there.New applications for the disinfectant use of chlorine dioxide are also being developed. These should work in tandem with geographical expansion to support Tristel’s revenue growth.After-tax profits and earnings per share dipped in 2016 and 2018 due to higher taxes paid on those years, although the overall trend is up. Pre-tax profits, on the other hand, have increased over the last four years, from £2.55m in 2015 to £4.75m in 2019.Dividends were covered 1.7 times by earnings for the 2019 financial year, suggesting they are sustainable. The interim dividend was just increased by 15% from 2.04p to 2.34p. If that growth translates to the final dividend as well, then the yield will be around 1.4% for the year based on a share price of 456p.Healthy balanceA healthy balance sheet is a good thing. Tristel has nearly three times as much value in current assets as it does in current liabilities. This means liquidity is excellent with short-term obligations well covered by cash or close equivalents. Tristel has 34p of borrowings for every £1 in equity measured at the end of the last full fiscal year. Low debt means a clean long-term bill of health.The company manufactures its chlorine dioxide-based products in Cambridgeshire by reacting a chlorine-containing salt with an acid. The company does state that it sources certain chemicals, parts, and equipment from overseas manufacturers.It does not have significant exposure to supply chains in China, which have seen significant disruption from the novel coronavirus. Tristel has made arrangements to handle a no-deal Brexit. A logistics centre has been opened in and a notified body transferred to the EU. The latter act should help the company CE-mark its disinfectants and sell them within the EU unhindered.Overall, Tristel is making significant gains in a large market with products that have a competitive edge. Although the markets, in general, are turning bearish at the moment, I believe Tristel’s shares should outperform. Its products are essential in healthcare settings where spending cutbacks are unlikely.  I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Enter Your Email Address Our 6 ‘Best Buys Now’ Shares I think this AIM stock might clean up in a bear marketcenter_img James J. McCombie has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. “This Stock Could Be Like Buying Amazon in 1997” Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! James J. McCombie | Thursday, 27th February, 2020 | More on: TSTL See all posts by James J. McCombielast_img read more

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