MENU

Why the Ellex Medical Lasers Limited share price fell 14% today

The Ellex Medical Lasers Limited (ASX: ELX) share price looks set to finish the week deep in the red.

At one stage during morning trade the medical device company’s shares fell as much as 14.5%.

At the time of writing they have recovered a good portion of this decline, but still sit 8% lower at 99 cents.

What happened?

After the market closed yesterday Ellex provided the market with an update on its sales for the year ending June 30 2017.

According to the release, the company generated unaudited sales of $71.7 million in FY 2017, down 1.6% on the previous year.

As approximately 90% of its sales are derived from overseas, unfavourable currency movements have been blamed for the drop in sales. On a constant currency basis sales would have been up close to 1% year-on-year.

A year earlier it was very different for the company, with favourable currency movements positively impacting its sales result by $7.2 million. This led to sales growing 16% year-on-year.

Further to this drop in sales, the market doesn’t appear to have responded positively to the company’s plans to significantly increase its sales and marketing expenditure in FY 2018.

But with management expecting this aggressive growth strategy to materially accelerate the sales growth of its iTrack device, I feel shareholders should give it the benefit of the doubt.

Should you invest?

With its shares down sharply this year, I think that Ellex could be well worth taking a close look at. Whilst this year’s performance has been a touch disappointing, it is worth remembering that there is a significant market opportunity out there for its iTrack device.

Based on research by Marketscope, the annual market for minimally invasive glaucoma surgery is expected to grow from approximately US$200 million today to US$1 billion by 2021.

Because of this I would put it up there with the likes of Nanosonics Ltd. (ASX: NAN) and Medical Developments International Ltd (ASX: MVP) as healthcare shares to consider today.

Alternatively these three blue-chip shares could be even better options if you ask me. I'm tipping them for big things in FY 2018.

Top 3 ASX Blue Chips To Buy In 2017

For many, blue chip stocks mean stability, profitability and regular dividends, often fully franked..

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool's in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool's Top 3 Blue Chip Stocks for 2017."

Each one pays a fully franked dividend. Each one has not only grown its profits, but has also grown its dividend. One increased it by a whopping 33%, while another trades on a grossed up (fully franked) dividend yield of almost 7%.

The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand - and how quickly the share prices of these companies moves - we may be forced to remove this report.

Click here to claim your free report.

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.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.