Friday, April 16, 2021

Buying Medpace Holdings (MEDP) @ $180.73


Medpace is a Contract Research Organisation (CRO). Basically allowing entities that are looking to introduce new drugs, treatments or medical devices for FDA approval. 

The FDA filing process is extremely complicated and filing mistakes could mean long delays and big losses.

Medpace allows these companies to streamline the process by providing experts as well as software that the company use throughout the initial development and testing stages and eventually submitting to the FDA.

- Founded in 1992 by Dr. August Troendle, who came from the FDA. He's still CEO today.

- The company IPO's in 2016.

- Dr. Troendle still owns 20% of the company. He also invested $20M in his own IPO..

- The company is 100% debt free.

- Company has $278M in cash and free cash flow is growing annually at 23.4% to $277M last year.

- I like the field the company is working in. Plenty of demand and no serious competition.

- The company is founder led, 'under the radar' with very experienced management. 

- At a P/E of 48 - the company is expensive, but I wouldn't expect to get such quality on the cheap.

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