With consecutive interest rises forcing Australians to close their wallets, this might be a consideration for the coming period.

But of course, the well-known ASX shares in the sector are already well bought.

So one Wilson Asset Management analyst has dug deeper into his research to come up with a couple of buys that are not yet household names:

'This company can re-rate over the next few years'

Probiotec Limited (ASX: PBP) only has a market capitalisation of $180 million. 

But for such a small cap it has managed to hold its stock price pretty well in 2022, only down 1.76% so far.

Wilson senior equity analyst Sam Koch is buying the pharmaceutical manufacturer and distributor.

"We believe the stock offers investors valuation and earnings upside," he said in a Wilson video.

"What the market's missing here is their ability to compound earnings growth at a very high rate, relative to its current valuation."

The business' "strong organic growth" is accompanied by bolt-on acquisitions, he added.

"Trading at 10 times P/E with over 15% [earnings per share] growth projected, we believe that this company can re-rate over the next few years."

While coverage is sparse on Probiotec, at least Shaw and Partners currently agrees with Koch, rating the stock as a strong buy.

Probiotec hands out a 2.5% dividend yield.

Share price now below PE ratio of ONE

CogState Limited (ASX: CGS) is arguably a technology business in addition to its involvement in the health sector.

That's because it's a cognitive science company that provides tech and services to biotechnology and pharmaceutical clients conducting clinical trials.

Koch said that big pharma relies on CogState's technology for their studies into Alzheimer's Disease.

"What we're really attracted to in CogState is that they were one of the first companies to provide the software-first technology, which has accelerated the industry's push towards decentralised clinical trials."

The value of CogState's services was recognised in one of its largest clients actually taking a 7% shareholding, according to Koch.

"The company's trading at below one times earnings-to-price growth multiple with over 15% of the market cap caught up in cash," he said.

"We believe that acquisitions and earnings upgrades will drive the stock from here."

According to CMC Markets, three of four analysts currently rate the stock as a strong buy.

The CogState share price has dropped more than 19% so far this year.

The post 2 ASX healthcare shares to buy that you've not heard of: expert appeared first on The Motley Fool Australia.

At the time of writing, Probiotec shares are up 7.18% to $2.09.

How is Probiotec performing in FY21? 

Investors are snapping up Probiotec shares following the company's trading update and strong earnings outlook.

According to its release, Probiotec announced it is continuing to deliver on its strategy, increasing value for shareholders. Both existing and new customers have inquired about the company's onshore manufacturing capability.

The company stated that its pharmaceutical product categories affected by COVID-19 are beginning to recover. It is anticipated that this will progressively improve throughout the first-half of FY22, with normal levels returning in H2 FY22.

Although, the current lockdown in Victoria is expected to have a slight impact on the overall group's earnings for FY21.

Pleasingly, Probiotec's recent acquisition of Multipack-LJM in January this year has performed in line with expectations for the 6 months. The business' earnings are weighted more towards the second-half end of the year (July to December). With that in mind, the company is focused on using Multipack-LJM's toolkit to attract more customers and drive revenue growth.

Looking ahead, Probiotec is forecasting revenue to be in the range of $118 million to $122 million. This is a minimum increase of 10% on FY20's result of $107 million.

Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) is projected to come between $21 million and $22 million. When compared against the prior corresponding period ($16.9 million in FY20), this is around a 25% jump.

Underlying earnings per share (EPS) is predicted to drop from FY20's result (11.1 cents per share). This metric is assumed to fall somewhere between 10 cents and 11 cents per share.

Probiotec share price snapshot

In November, Probiotec shares raced higher following notice of its planned acquisition of contract packing specialist, Multipack-LJM. The company's share price reached an all-time high of $2.50 when the takeover was completed in January.

Since then, Probiotec shares have been on a downhill trend, posting a loss of 12% on year-to-date share price performance.

Based on today's price, Probiotec has a market capitalisation of roughly $163 million, with 78 million shares on its registry.

The post Why the Probiotec (ASX:PBP) share price is surging 7% today appeared first on The Motley Fool Australia.

The pharmaceutical manufacturing company's shares were up as much as 67% to a multi-year high of 47.5 cents at one stage.

When the IDT Australia share price hit that level, it meant it was up 150% in the space of just two trading sessions.

The company's shares eventually ended the day with a gain of 52.5% to 43.5 cents.

Why is the IDT Australia share price up 150% in two trading sessions?

Investors have been scrambling to buy IDT Australia's shares following the release of a positive yet brief announcement at the end of last week.

That announcement revealed that the Australian Government's Department of Health has been in touch with the company in respect to support in manufacturing COVID-19 vaccines.

According to the release, IDT Australia is now undertaking a feasibility assessment to assess the possibility of utilising its sterile manufacturing facility to supplement the production capability for a COVID-19 vaccine.

What next?

At this stage, no further details have been released. However, the company intends to provide the market with updates as and when additional information comes to hand.

Though, given its experienced team of specialists and world class facilities, the company appears well-positioned to help with the vaccine manufacturing.

But because of the unknowns, investing at this stage is very high risk. After all, nobody knows just how much revenue would be generated should the company be given a contract.

IDT Australia isn't the only company that investors have been buying shares of for this reason.

The Probiotec Limited (ASX: PBP) share price has also risen strongly over the last two trading sessions.

Probiotec is a leading manufacturer, marketer, and distributor of a diverse range of prescription and over-the-counter pharmaceuticals, complementary medicines, and specialty ingredients. Investors may believe it could be called into action as well.

The post Why the IDT Australia (ASX:IDT) share price is up 150% in just 2 days appeared first on The Motley Fool Australia.

What Probiotec does

Probiotec is a manufacturer, marketer and distributor of a range of prescription and over-the-counter (OTC) pharmaceuticals, complementary medicines and consumer health products.

It owns 4 manufacturing facilities in Australia and counts a number of major international pharmaceutical companies as customers. As such, it distributes products both domestically and internationally.

How are the financials?

The company highlighted its strong year of growth, telling the AGM:

2020 was a highly successful year for Probiotec in which we successfully met our objectives and achieved strong financial results for shareholders.

The company reported revenue growth of 46% from the year before, bringing in $107.2 million. It was the first time Probiotec has reached more than $100 million in revenue. Furthermore, the company reported earnings before interest, tax, depreciation and amortisation (EBITDA) of $16.9 million, up 79% on FY19. This was towards the upper end of its guidance ($16 to $17 million).

Probiotec's strong financial performance was driven by impressive organic growth and solid acquisitions. This was performed in the face of the coronavirus pandemic that has driven the S&P/ASX 200 Index (ASX: XJO) down 10.5% from this time a year ago.

What's next for the Probiotec share price?

The company did not provide guidance due to the ongoing uncertainty surrounding COVID-19. However, Probiotec reported that its Q1 FY21 trading performance was ahead of budget. The company announced that sales were up 6.5% with each of its operations performing above expectations.

The Probiotec share price is currently trading 3.75% higher as it looks to bounce of its 52-week low of $1.55.

The post Why the Probiotec (ASX:PBP) share price is trading higher appeared first on The Motley Fool Australia.

It shares finished the day almost 7% higher at $2.37. This latest gain means the Probiotec share price is now up a sizeable 55% over the last 12 months.

What is Probiotec?

Probiotec is a manufacturer, packer and distributor of a range of prescription and over-the-counter (OTC) pharmaceuticals, complementary medicines and consumer health products.

It owns three manufacturing facilities in Australia and counts a number of major international pharmaceutical companies as customers.

Why did the Probiotec share price surge higher today?

Investors were fighting to get hold of the company's shares following the release of an update on its expectations for the first half of FY 2020.

According to the release, the company expects to report first half revenue from continuing operations of $44.1 million. This will be a 34% increase on the same period last year.

Growing at an even stronger rate will be the company's EBITDA from continuing operations. For the six months ended December 31, management expects EBITDA from continuing operations of approximately $6.2 million. This represents an increase of 68% on the prior corresponding period.

In the absence of any unforeseen events and subject to normal trading conditions, management expects an equally strong full year result.

It has reaffirmed its guidance for full year revenue of greater than $100 million and EBITDA in the range of $16 to $17 million for FY 2020.

Though, there appears to be scope for the company to outperform this guidance. Management advised that Probiotec continues to receive solid levels of enquiries and sales leads.

Furthermore, it notes that it is well positioned to capitalise on these opportunities with significant capacity available as a result of recent investments.

The company's CEO, Wes Stringer, said: "We are pleased that we have continued to execute with respect to the delivery on the existing portfolio of the business as well as the ongoing integration of our recent acquisitions."

The post Why this small cap ASX share zoomed 7% higher today appeared first on The Motley Fool Australia.

Three shares at the small end of the market that have started the new month with a bang are listed below. Here's why they are on the rise today:

The Food Revolution Group Ltd (ASX: FOD) share price has jumped 9.5% to 11.5 cents. This morning the juice company announced that it has received the second tranche payment ($2.51 million) as part of the strategic investment announced in September. This is part of a $20.25 million strategic investment led by Careline and its CEO Norman Li. The company aims to use the funds to grow its sales from $35 million to up to $500 million within three to five years. I think Food Revolution is worth adding to your watchlist.

The Praemium Ltd (ASX: PPS) share price has zoomed 9% higher to 84 cents despite there being no news out of the fintech company. This latest gain means that Praemium's shares have now rocketed 23.5% since the start of trade on Tuesday. Investors appear to be seizing on share price weakness in October brought about by the market meltdown and tech selloff. The company's shares were trading at $1.13 at the start of last month, so are still down over 25% since then even after this week's gains.

The Probiotec Limited (ASX: PBP) share price has pushed 9% higher to $1.43 after the manufacturer, marketer, and distributor of pharmaceutical products announced a special dividend and share buyback. According to the release, the company intends to commence an on-market buyback for up to 10% of the shares on issue in the middle of this month. In respect to its dividend, Probiotec has declared a fully franked special dividend of 5 cents per share. Its shares will go ex-dividend on November 8, with the dividend being paid a week later on November 15.

The post These small cap ASX shares are pushing higher on Thursday appeared first on The Motley Fool Australia.