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Should I Invest In Bioventix PLC, Flybe Group PLC And Tasty Plc Now?

Bioventix (LSE: BVXP) only landed on the AIM market in April, but already the antibody supplier attracts a keen following from private investors.

The firm’s esoteric market niche isn’t putting investors like me off. Last year’s turnover came in at £3.35m, yet the net profit before tax scored £2.23 million — that’s a margin of ‘a lot’ %, but is it sustainable going forward?

Hard to imitate

Why not? The firm operates a hard-to-replicate business model. In its own words, Bioventix specialises in the development and commercial supply of high-affinity monoclonal antibodies with a primary focus on their application in clinical diagnostics, such as in automated immunoassays used in blood testing.The antibodies created are generated in sheep and benefit targets present at low concentration where conventional monoclonal or polyclonal antibodies fail to produce a suitable reagent. 

That’s quite a mouthful, but offering a range of antibodies to customers for both commercial use and R&D purposes is proving to be a profitable niche market for Bioventix. The company’s in-house development programme produces some of the tools scientists need to tackle the diagnosis or monitoring of a broad range of conditions, including heart disease, cancer, fertility, thyroid function and drug abuse.  

What I most need to know as an investor is that the business model is profitable and has good growth prospects. The fact that new start-ups don’t challenge the firm’s profit margins every day is a big bonus. 

At a share price of 680p, the forward P/E rating is running at around 16 for 2015. There’s a forward dividend yield of 3.9% with forward earnings expected to cover the payout about 1.6 times. Given that the firm expects to push up its earnings by 18% that year, the valuation still seems modest for such a fast-growing business. 

Turning things around and growing

Although an airline is never a buy-and-forget investment proposition, the turnaround credentials of Flybe Group (LSE: FLYB) continue to fascinate. The once-struggling regional operator started to improve its performance last year. 2013 saw change at the top with a new Chief Executive and a new Chairman who brought clarity for the vision of the enterprise. Flybe aims to be Europe’s best regional airline, and improving financial results in 2013 suggest it is heading in the right direction.

In March, Flybe raised around £150 million in a fully underwritten placing and open offer. That’s a big lump for a firm with a market capitalisation of £241 million at today’s 111p share price, but it solidifies Flybe’s capital structure and provides the funds to progress the financial and operational efficiencies needed to grow.

Flybe nosed into profitability last year and expects to grow earnings to more than 18p per share during year ending March 2016. The forward P/E ratio is running at just over six. That seems cheap if the firm can realise its ambitions.

Pizza, pasta and fun

An equally compelling story exists at Tasty (LSE: TAST). The firm owns around 32 restaurant outlets mostly branded Wildwood, and specialising in pizza, pasta and fun times. Most of the outlets sit in the south and east of England.

The firm’s rollout is gaining traction. In the recent half-year report, Tasty said seven new sites opened this year already. The trading figures were good, with revenue up 26%, operating profit up 16% and pre-tax profit up 24%. It looks like the firm is on course for another great year of trading, which will add to an impressive record of improving results over several years.

At today’s share price of 100p, the forward P/E rating is running below 18 for 2015, which sits well against projections of a 27% earnings’ uplift that year.

All three of these firms seem attractive right now; as does a company the Motley Fool team labelled The Motley Fool's Top Growth Share. You can download the free report, without obligation, by clicking here.

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Kevin Godbold owns shares in Bioventix and Tasty. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.