Motley Fool Australia

Why the 1300 Smiles (ASX:ONT) share price is smashing record highs

Surge in ASX share price represented by happy woman pointing to her big smile
Image source: Getty Images

The 1300 Smiles Limited (ASX: ONT) share price hit another record high today despite there being no news out of the company. At the time of writing, the 1300 Smiles share price is sitting 4.26% higher at $6.85, after being as high as $6.9 in intraday trading today.

The company has had a successful 2020, with its shares rebounding strongly from the COVID-19 market rout. The 1300 Smiles share price has gained more than 43% since its lows in early March.

Bundaberg practice

One possible reason for the company’s recent strong share price performance is its acquisition of a new practice in Bundaberg. On 24 November, the company expanded its footprint further into the Wide Bay region in Queensland. The new practice adds to its two existing Bundaberg practices.

Commenting at the time, 1300 Smiles managing director, Dr Daryl Holmes, said:

This is an exciting acquisition as we already have two well established practices in the area. It will ensure that we can service the Wide Bay area even further. We look forward to welcoming the team of dentists and support staff to 1300SMILES following completion.

Successful AGM

1300 Smiles also highlighted the company’s strong revenue in the first quarter of 2021 at its annual general meeting (AGM) on 26 November. As such the health care share saw revenue increase by 16%.

Management also noted the strong recovery post COVID-19. Since the easing of restrictions in May, trading has been strong, driven in part by latent demand and new patients.

Also positive was the reduction in net debt. Despite the challenges of the pandemic, net debt reduced by 15% from $8.3 million to $7.1 million – a result of debt repayment. This leaves the company in a position to take advantage of future capital projects as they become available.

What now?

With the 1300 Smiles share price gaining 10% in the past year, the company has outlined a plan to continue its growth.

Management noted that profits would be increased by attracting more dentists to its existing facilities and expanding those facilities which are already at full capacity. Moreover, 13300 Smiles will place a priority on assisting dentists who already practice with the company to increase turnover and income.

Furthermore, 1300 Smiles suggested the need to establish new practices, both in areas of existing presence and into new regions.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

*Returns as of February 15th 2021

Motley Fool contributor Daniel Ewing has no position in any of the stocks mentioned. The Motley Fool Australia has recommended 1300SMILES 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 Scott Phillips.

Related Articles…