Posted on December 2, 2020 by Aaron Warwick
On November 24, I wrote a brief summary about why I am so bullish on Milestone Scientific (MLSS). Yesterday, Seeking Alpha published my article, which provides a more comprehensive look at the company. In that article, I argued that the company should soon be able to announce some hospital wins for its patented CompuFlo and CathCheck products. I also discussed why I am bullish on their dental business returning to pre-pandemic levels–and likely beyond.
After I submitted my article for publication, but before it was actually published, MLSS announced their dental revenue for 4Q 2020 will “at least” meet their guidance, although it is likely to exceed that, perhaps significantly. In addition, as I noted in a Featured Company update, MLSS changed their distribution plan to include more distributors in the US and Canada for their dental product, and to give themselves more flexibility to sell into various channels. These are all, in my opinion, positive developments.
However, I encourage readers to view the Comments section to my article. There, you can see why the stock price is relatively depressed compared to MLSS’s potential. Specifically, many investors are tired of waiting on MLSS. Several seem not to grasp just how difficult the early pandemic was for MLSS, with dental offices throughout the world closing, or drastically cutting down on the number of patients they see. On top of that, they seem not to understand that for at least a full quarter, MLSS had absolutely no access to physically enter hospitals to sell their medical products, and that even to this day, several hospitals have frozen purchases of new equipment through 2020.
While I understand their frustration and skepticism, I have actually been thinking how the pandemic, in the long run, will be a net positive for MLSS. That’s quite a bold claim given that the business was almost decimated. But consider the following: (1) MLSS was about to sell their dental business, but I believe FY 2021 will be profitable for dental, and will likely exceed pre-pandemic levels; (2) MLSS had to develop alternative strategies to encourage the adoption of their medical products, a strategy I discussed in my first MLSS article, and which seems to be paying off; and (3) during the pandemic MLSS changed management, promoting Arjan Haverhals to MLSS President, a move which is already paying off with his sales and distribution experience.