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This growth star is completely thrashing the 88 Energy share price

Surgical and advanced woundcare specialist Advanced Medical Solutions Group (LSE: AMS) shares are up 4% this morning. That’s after posting a steady 3% increase in group revenues to £47.6m in a report packed with positive numbers.

Advance!

This is a 6% increase at constant currency and was further supported by a gross margin improvement of 300 basis points to a whacking 63% for the six months to 30 June. Branded revenues climbed 10% to £30.1m, more than offsetting a dip in its OEM business unit, where sales fell 6% on weakness in the woundcare market.

The £688m AIM-listed stock is scoring in the US, where revenues rose 16% to £10.5m, or 27% at constant currency. Market share volume increased from 24% to 28%. Today’s interims included a 19% rise in adjusted profit before tax to £13.7m, a 16% rise in adjusted diluted earnings per share (EPS) to 5.01p, and a 29% rise in net cash, which leaves the company sitting on a healthy £71.1m.

Growth prospects

CEO Chris Meredith said full-year trading was in line with expectations and the board remained optimistic about the group’s organic growth prospects as the R&D pipeline grows and it seeks acquisition opportunities.

The stock is up a whopping 252% over five years and EPS are forecast to grow 6% this year, and 9% next. The downside is that its healthy growth prospects are in the price, with a forward valuation of 33 times earnings. Today, the board lifted the interim dividend share 20% to 0.42p. It yields just 0.4%, but with a healthy net cash balance and dividend cover of 8.4, further progression looks likely. My colleague Rupert Hargreaves certainly thinks so.

Low Energy

Advanced Medical Solutions hasn’t attracted a fraction of the attention of 88 Energy (LSE: 88E), a £64m oil exploration minnow which operates the majority of the vast 475,000 acre Project Icewine, targeting oil on the world-class North Slope of Alaska. This stock has attracted Alaskan-sized interest but, so far, investors have nothing to show for it.

The AIM-quoted group has been on a slippery slope since peaking at 2.81p on 4 June, following positive reports of progress at Project Icewine, in which it holds a 63% stake. However, subsequent news flow has disappointed as, later that month, it reported “no meaningful change” to the composition of gas and fluid returned from production testing at its number-two well.

88 in a state

Managing director Dave Wall is holding out hope saying the well “remains in its infancy and shows great promise.” But within days it had suspended work, with predictable consequences for the share price. 88 Energy now trades at just 1.20p.

As fellow-colleague Roland Head points out, with a net debt of $7.2m Icewine won’t go ahead unless it can draw in a new partner. Management is now pursuing its Western Blocks project through wholly-owned subsidiary Captivate Energy Alaska, which has a potential 400m barrels of oil and a 25-30% geological chance of success.

I tip my hat to investors who can take a punt on oil explorers like this one. But I’ve seen too many dry up to join their number. I prefer the strong, solid prospects on offer from Advanced Medical Solutions.

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harveyj has no position in any of the shares mentioned. The Motley Fool UK has recommended Advanced Medical Solutions. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.