Pro Medicus (PME) and Super Retail Group (SUL)
Hi Market Matters Team What's your view on Pro Medicus - Is the share price looking interesting now? - Will it be on your watchlist soon? Are we still holding SUL ? regards Debbie
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Answer
Hi Debbie,
Pro Medicus (PME): this software company operating in the healthcare space has corrected ~23% from its July high on value contraction as opposed to bad news per se. PME is still signing new contracts including a 5-year $10mn contract with University Hospital Heidelberg this month but when you’re trading on 173x FY26 it’s important to keep growing.
In similar fashion to DroneShield (DRO) and the gold sector the “hot money” has danced away from this impressive growth story over recent months. As we wrote two weeks ago:
- “With operating margins above 70%, PME converts most revenue into profit, enabling strong R&D investment, acquisitions, and share buybacks. We like a lot about the business, except the price. A few quiet months with little in the way of new contract wins could easily see the stock retreat another 10%.”
The stock has done just that drifting off ~10% in just 2-weeks, but we wouldn’t be surprised to see more and remain comfortable on the sidelines.
Super Retail Group (SUL): what a difference a day makes, or in SUL’s case a few weeks. The stock popped to new highs above $20 after delivering a solid result in late August. But today it’s struggling to hold above $16 following internal staffing issues – the board sacked CEO Anthony Heraghty after admitting his disclosures about a relationship with senior executive Jane Kelly were “not satisfactory” and there are ongoing Federal Court cases from ex-executives alleging bullying, victimisation, and non-disclosure, plus an active ASIC probe.
The personal ructions are disappointing but recent underlying operational performance has been solid, and we are sticking with SUL for now.
