The Pro Medicus Limited (ASX: PME) share price was a particularly positive performer in October.
During the month the healthcare technology company's shares recorded an impressive 22.4% gain.
This compares to a 1.9% gain by the benchmark S&P/ASX 200 Index (ASX: XJO).
Why did Pro Medicus outperform the market?
Investors were fighting to buy Pro Medicus shares last month following the release of an update which revealed a major new contract win.
That contract win was with one of the largest university hospitals in Germany, LMU Klinikum.
According to the release, Pro Medicus has signed a seven-year deal with LMU Klinikum worth a total of A$10 million.
The deal will see its popular Visage 7 technology deployed throughout LMU Klinikum's radiology and subspecialty imaging departments. This will replace a number of systems from legacy vendors with a single centralised platform from December.
In addition to this, Visage will be used in the hospital's state of the art operating theatre suite for high definition video documentation and point-of-care ultrasound archival and viewing.
Why is this a big deal?
While a $10 million contract isn't necessarily a game-changer, it is who the contract is with that has got both the company and investors excited.
Pro Medicus' Visage Imaging Managing Director, Dr Malte Westerhoff, explained: "We are very excited about this project. LMU Klinikum is a thought leader in making a digital strategy a core principle of their operations. We are confident that our technology and expertise can make a significant contribution to helping LMU Klinikum further enhance efficiency and achieve better patient outcomes."
Dr Westerhoff also pointed out that multinational imaging equipment vendors have had a stranglehold on this part of the market for a long time, which makes this deal a real milestone.
He added: "Traditionally, large European teaching hospitals like LMU Klinikum have standardised on IT platforms from large, multinational imaging equipment (modality) vendors making this a difficult market to penetrate. So this is a very significant milestone for us in this highly competitive market."
Is it too late to invest?
While Pro Medicus shares are certainly not cheap, I believe they could still be a great option for buy and hold investors due to its exceptionally strong long term growth potential.
In light of this, I think it is worth considering a small position in a balanced portfolio.
