Pick of AIM by James Crux

Worth putting on your stocks-to-watch list is African Medical Investments, where Africa-savvy duo Andrew Groves and cricket legend-turned-entrepreneur Phil Edmonds hold sway.

Bossed by ex-trauma surgeon Dr Vivek Solanki, CEO, African Medical is a healthcare facility developer and operator tapping African demand for private healthcare. Still at the development stage – the company lost US$1.89 million on US$1.83 million sales in the half to August – African Medical is rolling out state-of-the-art health facilities (trauma clinics and ‘well-woman’ centres) and boutique hospitals across this vast continent. Its sites may be low cost, but the care they provide is ‘first world’ and they quickly generate cash and profits.

Already up and running are a flagship boutique hospital, trauma centre and well-woman clinic in Tanzania, a site at Johannesburg International Airport, a trauma centre in Harare and the Airport Medical & Travel Vaccination Centre at Cape Town International Airport. Two new healthcare facilities are planned for Maputo in Mozambique and Kilimanjaro International Airport in Tanzania.

New York-based hedge fund Harbinger Capital clearly likes what it sees, having backed its expansion with US$47 million. African Medical, targeting 15 centres by 2015, has also inked an agreement with AIG Travel, which is recommending its sites to clients who might need medical care on their African travels.

Stoking strong interest from companies, health insurers and embassies, seeing impressive patient numbers at all of its facilities and having demonstrated that its sites can turn cash positive within four months, African Medical shares – floated on AIM in 2008 at 10p and now 21p, valuing the company at £41 million – are worth buying and stashing away.

Global growth from HCL
I notice health sector mover and shaker Kate Bleasdale has snapped up another 50,000 shares (at 252p) in Healthcare Locums, the fast-growing health and social care staffer where she is executive vice chairman, upping her holding to 9.61 per cent.

This purchase came shortly after HCL’s international division signed an agreement with the South Korean government to exclusively train and develop the country’s surplus nurses, midwives and medical support staff, readying them for international placements. Under the terms of the tie-up, Healthcare Locums will help place them in suitable jobs internationally.

Offering growth through huge overseas expansion potential, HCL, which grew first-half profits 64 per cent to £9.5 million, should deliver £31.3 million of profit and 21.2p of earnings for 2009. At 262.75p, the strongly performing shares are selling for less than 13 times earnings and remain cracking value.

Wray ups his stake
On the speculative side, despite recent positive progress, is Warrington-based sector investor Healthcare Enterprise, at which the entrepreneurial John Gunn is a director and in which astute serial small companies investor and backer Nigel Wray recently upped his stake from 4.96 per cent to 6.2 per cent.

Healthcare Enterprise holds a 20 per cent stake in Ebiox, the company behind a range of hand hygiene, surface disinfectant and surgical decontamination products, as well as 27 per cent of Reproductive Sciences, the firm that makes an innovative pump proven to enhance pregnancy success rates.

In encouraging recent news, Healthcare Enterprise said third-quarter sales at Ebiox, now led by new management, were 53 per cent up year-on-year, driven by good growth in hand- and surface-cleaning products in the wake of the swine flu outbreak.

At 31.5p, valuing Healthcare Enterprise on AIM at a minuscule £1.8 million, the shares are worth a flutter, though do bear in mind that latest reported financials (for the six months to December 2008) revealed losses of £1.3 million on modest sales of £248,000.