Antonio Garufi presented his in-depth investment thesis on Orasure (Nasdaq: OSUR) at Best Ideas 2016.
Orasure is a worldwide leader in oral fluid diagnostics. Its rapid tests range from HCV to HIV in-home kits and substance abuse testing, as well as molecular diagnostics sampling devices. The company has been through tough times as its HIV in-home rapid test, which was supposed to be a blockbuster, did not deliver. Management has also disappointed markets with inflated expectations. Nonetheless, the company runs a good business: growing underlying trends, high gross margins and dominant position in untapped markets. Orasure also trades at low multiples compared to peers in terms of EV-to-revenue and at a sizable discount to intrinsic value, has a 30% ratio of net cash to market value, and generates cash at a growing rate (~3% FCF yield in 2016 growing at ~6.5% in 2018). The company recently broke even, ahead of expectations. Its P&L structure, with high margins and low fixed costs, implies high net income generated for each unit of sales.
About the instructors:
Antonio Garufi is a portfolio manager at Astor Investment Advisors, based in Milan. He has 11 years of experience in finance of which 3 working for JPMorgan in London. He then went on the buyside at Astor where he analyzed and executed investment opportunities across a number of sectors and asset classes, focusing on healthcare. He graduated from Bocconi University in 2005, where he is currently lecturer, has a Phd in Business Administration and attended the Value Investing Program at Columbia Business School.
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