There are lots of way to attack this trend from a stock market perspective; we can look at fitness clubs, obesity stocks, botox stocks, breast implant stocks. Or women‘s legs. It‘s important to note also that the size of the demographic of “women aged 45-55” increases every year by about 1m people. In other words, regardless of the economy, there‘s another potential 1m customers for companies that cater to helping women in this demographic look good. So let‘s look at some of these companies.
Venus Medical Technologies. The company specialises in non-invasive, outpatient treatment of varicose veins, which plague women in their 40s and 50s. About 25m people in the US suffer from varicose veins and another 40m in western Europe. In 2006, 1.2m sought treatment for the condition. The reason so few seek treatment is that it often involves painful invasive surgery (removing the vein in question) with many potential side-effects.
The Venus procedure is to give the patient an “RF Generator”, which provides the power and monitoring for a disposable catheter that heats the vein. The disposable catheters generate recurring revenues for the company. Out of the estimated 65m people with varicose vein conditions, only about 90,000 have used the company‘s procedure for treatment. This company is potentially the Starbucks of women‘s legs once it starts to expand its demographic reach. Revenues have gone up every year since it first started selling the product in 1999.
Syneron Medical is another company in the sector.
Syneron also uses radio frequency (RF) energy to deliver heat layers of the skin below the epidermis, avoiding burning associated with other skin treatments. With this device the company can constantly monitor the level of heat and energy that is being applied to an area and adjust accordingly. Its treatments have been used for wrinkles, leg veins, acne, cellulite and a host of other cosmetic solutions.
Revenue has gone up every year since 2001. I also like that the company is sitting on $167m in cash, no debt, and only a market capitalisation of $444m – so almost half of its market cap is in cash.
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