Supply Chain Tech Stock Could Get a ‘Shot in the Arm’ From the COVID Vaccine Rollout

Tecsys Inc. (TSX:TCS) has the potential to dominate the $600 million health care provide chain administration house

Cash Ideas Media | February 5, 2021 | SmallCapPower: Supply chain management, which makes sure the productive stream of merchandise setting up from accumulating the uncooked supplies all the way to delivery of the final product, has grow to be crucial in our increasingly elaborate worldwide professional ecosystem.

(Originally published on Cash Ideas Media on December 15, 2020)

 

Canadian company Tecsys Inc. (TSX:TCS) develops and sells enterprise-wide provide chain management application for distribution, warehousing, and transportation logistics, concentrating on principally the North American marketplace.

[Editor’s Note: Shares of Tecsys have climbed 19% since Capital Ideas wrote about the company about six weeks ago.]

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The business a short while ago documented far better-than-envisioned Q2 Fiscal 2021 profits that rose 18% calendar year about 12 months to $30.7 million, its seventh consecutive quarterly major-line report. About 63% of its profits all through the past 12 months arrived from the United States and Tecsys has extra than 1000 clients throughout the world.

Recurring revenue, even though, carries on to be the target at Tecsys, as its once-a-year recurring income climbed 26% yr about yr to $50.9 million, which it attributed principally to eCommerce proliferation.

As properly, increased-margin SaaS (computer software as a provider) income continues to be the Company’s fastest-expanding earnings stream (now accounting for 17% of gross sales), with trailing twelve thirty day period SaaS bookings surging 159% from a yr earlier. The Company’s changeover to a SaaS organization model is expected to generate accelerated natural progress.

Tecsys also recorded a second-quarter profit of $2.1 million or $.14 per share, up from $1.4 million, or $.11 for every share, throughout the exact period of time last yr.

Cormark Securities analyst Gavin Fairweather wrote not long ago that Tecsys is owning discussions on opportunity possibilities to offer application to handle the distribution of COVID-19 vaccines.

“Its remedy is compliant with drug offer chain security act needs and can tackle chilly chain deployments. The R&D workforce has also designed a position-of-use software to track the shipping of the vaccine,” he said, incorporating that possible profits from this could be “meaningful.”

Tecsys does have experience in this location, suggests Laurentian Financial institution Securities analyst Nick Agostino, who famous that the Corporation was associated in the H1N1 vaccine rollout in the US above a interval of about a yr in 2009.

Mr. Agostino famous that Tecsys proceeds to investigate M&A possibilities in just the US health care source chain management place, as properly as “expanding its geographical access in Europe and Asia to complement organic progress.” The world-wide healthcare supply chain administration sector is believed to be a $600 million current market chance.

At last, Tecsys traders have benefitted from the Company’s restricted money construction (just 14.4 million shares fantastic), about 26% of which are owned by Company insiders.

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