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Is the Medical Developments International Ltd share price in the buy zone after today’s announcement?

The Medical Developments International Ltd (ASX: MVP) share price has edged higher in early trade following a positive announcement.

At the time of writing the healthcare company’s shares are up 1% to $4.84.

Why has it jumped?

This morning the company announced that New Zealand’s leading provider of Ambulance Services, St John Ambulance, has advised that changes to its clinical practice and guidelines mean that Entonox (nitrous oxide) will be discontinued during 2017.

This will leave the company’s Penthrox product as the only inhaled analgesic administered by the ambulance service.

Penthrox, also known as the green whistle, is a hand-held inhaler used for self-administration of methoxyflurane for pain relief.

In the last 12 months its presence worldwide has grown at an incredible rate and at the last count was being sold in 17 countries including the UK, France, and South Africa.

What’s next?

Pleasingly, management expects similar changes to happen in other ambulance services around the world, especially in the European market as Penthrox is rolled out.

If this does in fact happen, I believe this could potentially lead to bumper profit growth for this fast-growing company over the next decade.

In light of this I would put Medical Developments International up there alongside Ramsay Health Care Limited (ASX: RHC) and Nanosonics Ltd (ASX: NAN) as great buy and hold investment options.

While its shares are reasonably expensive, I feel its long-term growth potential is undeniably strong and could justify the premium.

The only real disappointment at this point is that Medical Developments International doesn't provide much by way of dividends. So if you are looking for a big yield to boost your income then look no further than this stellar dividend share.

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Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia owns shares of Nanosonics Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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