The Cochlear Limited (ASX: COH) share price has pushed higher this morning following the release of its annual general meetings presentation.
In late morning trade the hearing solutions specialist's shares are up almost 1% to $187.00.
What was in the presentation?
As well as looking back at its strong performance in FY 2018, the company reminded investors of its sizeable market opportunity.
According to the presentation, it feels that hearing loss is both prevalent and under-treated. The company estimates that there are 15 million people globally that could benefit from a cochlear or bone conduction implant.
Based on current industry sales, this means that implantable hearing solutions have penetrated less than 5% of the total addressable market.
As a result, one of the company's strategic priorities is to grow the hearing implant market. It intends to achieve this by growing awareness, improving market access, and providing clinical evidence.
Another strategic priority that Cochlear has is retaining its market leadership. One way it hopes to achieve this is through its market-leading products.
Which is why I think last week's announcement is a pretty big deal. Last week Cochlear advised that it has commenced a clinical feasibility study to evaluate a totally implantable cochlear implant technology.
While the technology is complex and a commercially available product is not expected for years, I believe it has the potential to be a game-changer if it is eventually released. If it is first to market with the technology it should allow the company to maintain its position as the market-leader for a long time to come.
What about FY 2019?
In August Cochlear announced that it expects to deliver a reported net profit of $265 million to $275 million in FY 2019. This will be an 8% to 12% increase year-on-year.
Management retained this guidance this morning. It advised that this is expected to be driven by "continued growth across the developed markets, which represent around 80% of cochlear implant revenue." In addition to this, it has forecast strong growth from emerging markets.
Should you invest?
While this level of growth may not seem like enough to justify the multiple that its shares trade at, I believe its strong long-term growth potential goes some way to doing so.
In light of this, I continue to see it as a great buy and hold investment option along with ResMed Inc (ASX: RMD) and CSL Limited (ASX: CSL).