Stock of the Week: Infratil

This is a stock which came up on The Call (12-1pm AEDT on Ausbiz) last week and got rave reviews… I must admit I didn’t know much about it.

This week the New Zealand-based infrastructure investment company, Infratil, announced plans to acquire up to 60 per cent of Qscan Group from Quadrant Private Equity, for up to $330 million. Qscan is a comprehensive diagnostic imaging practice and has a portfolio of more than 70 clinics across Australia, including a network of 10 clinics offering oncology service.

Qscan provides a high-quality entry point into a sector with structural long-term growth and potential to scale into a leading healthcare infrastructure platform.

I asked our experts on The Call, Mathan Somasundaram from Deep Data Analytics and Gaurav Sodhi from Intelligent Investor, what they think of IFT and if this acquisition offer makes the stock a better investment. 

Gaurav says he likes this business.

“We’re seeing a fresh cycle for Infratil where it’s got a whole bunch of assets that are relatively new. It will now apply the ‘smarts’ and monetise them in a few years time. It’s done this for almost 30 years and achieved terrific results over that period.

“It’s got great management, good partnerships, good assets and good ‘smarts’. Ultimately in two or three years time, I think it’s [share price] is worth $9-$10 as the company grows.”

Mathan agrees with Gaurav and points out the whole diagnostic imaging sector is quite hot now.

“There is more optionality with Qscan thrown in the mix. These guys are really good managers. They are looking at the longer-term picture and buying something to make it into something even better.

“IFT obviously has a very good insight into New Zealand. The great thing about New Zealand is that it’s a little testbed for technology and infrastructure. This business ticks a lot of boxes, it’s a good buy.”