I will discuss one of those stocks below (Micro-X ASX: MX1, which has had a positive announcement this week) but first some general observations on the purpose of the trip and how it was organised.
Getting away from senior company management in Australia, to talk to local management, their customers and their suppliers, allows different perspectives on businesses we already know. There are always new things to find out, hopefully more good news than bad, but either way, it’s better to find out and react as early as possible.
I was pleased to find that the good news continues to vastly outweigh the bad, giving me confidence that the portfolios are well positioned, despite recent challenging markets for smaller cap growth stocks.
In five days, I went to eight cities and conducted 12 meetings/site visits. It was a busy trip. Most days I had two flights. I found that delays in US air traffic tend to build up over the day, so that my night time flights were usually delayed. One of the benefits of a 24/7 flight economy is that here were no airport curfews, in fact on two occasions flights originally scheduled for 9pm actually left after midnight.
Micro-X has developed a mobile x-ray machine for hospital use that is about 15% of the weight of existing machines without loss of image quality. Based on carbon nano tubes, their laser based x-ray is a quarter of the size and weight of traditional tube heads. The bigger saving in weight and size results from not needing to generate high temperatures to function. The contrast in tube heads is shown in the pictures that I took while seeing their distributor, Carestream in Rochester, New York.
My visit to Carestream was made to get an understanding of Carestream’s approach to marketing Micro-X’s “Nano”: their views on the industry dynamics, size of the market opportunity, the level of resourcing they would commit and how well prepared they were, given the imminent launch of the product.
I met them without any-one from Micro-X being present and spent about 2 hours with them, including touring their factory. Pictured above is Mike Ficarra, the Senior Project Manager. I also met with the Clinical Development Manager (a radiologist), the Lead Service Engineer and the Chief Operating Officer of Carestream.
Over the course of the meetings, it became obvious that successfully selling the Nano is very important to the Carestream business. Competition for traditional digital x-ray devices is intense, and the Nano is a differentiated product that has no competition. Carestream sees it as an opportunity to increase their sales and to maintain their market leadership. It is branded Carestream. They confirmed previous reports that it has met with extremely positive customer feedback at radiology trade shows.
See the pictures below of me standing next to their traditional machine (the DRX-Revolution) on the left and the DRX-Nano on the right. The Nano is much lighter, but its big advantages are in cost, manoeuvrability and ease of use.