Fund Manager Summary
The fund managers believe that Compumedics Ltd presents a compelling opportunity for investors as the company emerges from pandemic-induced disruptions. In their opinion, the storm has passed, with normalised input prices and open shipping lanes leading to a resurgence in demand. The core Diagnostic Medical Device segment is expected to recover, with forecasts of $41m revenue and $5m net profit in FY23, potentially surpassing pre-COVID records. Additionally, the Medical Innovation segment shows promise, particularly with advancements in Brain Imaging and the growth of the eHealth software Nexus 360. Despite ongoing investments in innovation, the fund managers anticipate a strong return, projecting a 13x earnings valuation with significant upside potential as the company capitalises on its niche markets.
Source: Trading View
Commentary From The Managers
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Mereweather Capital
31 Oct 2025
$0.35
Summary
- Mereweather Capital sold their investment in CMP due to recurring capital raises from shareholders.
- Despite a decent return on the position, the original investment thesis did not materialize as expected.
- Covid significantly disrupted CMP’s global operations, leading to muted profits.
- Elevated shipping costs and a strong AUD further impacted profitability.
- While gross margins recovered, CMP's heavy investment in sales and marketing led to ongoing operating losses.
- Sales and marketing expenses more than doubled from $8.5m in FY19 to $18m in FY25.
- Revenue growth was insufficient to cover increased costs, resulting in increased debt from $1.5m to $13m.
- Mereweather Capital did not participate in the capital raise and was able to take profits when the share price spiked.
- The experience highlighted that luck can sometimes outweigh strategy in investment outcomes.
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Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
Mereweather Capital
31 Oct 2025
$0.35
- Mereweather Capital sold their investment in CMP due to recurring capital raises from shareholders.
- Despite a decent return on the position, the original investment thesis did not materialize as expected.
- Covid significantly disrupted CMP’s global operations, leading to muted profits.
- Elevated shipping costs and a strong AUD further impacted profitability.
- While gross margins recovered, CMP's heavy investment in sales and marketing led to ongoing operating losses.
- Sales and marketing expenses more than doubled from $8.5m in FY19 to $18m in FY25.
- Revenue growth was insufficient to cover increased costs, resulting in increased debt from $1.5m to $13m.
- Mereweather Capital did not participate in the capital raise and was able to take profits when the share price spiked.
- The experience highlighted that luck can sometimes outweigh strategy in investment outcomes.
Summary
Mereweather Capital
28 Feb 2025
$0.26
- Mereweather Capital notes a challenging first half for Compumedics (CMP) with revenue down 11% and a shift from profit breakeven to a $1.1m loss.
- Despite this, Mereweather Capital sees potential as CMP invests in building a team in the US for the growing home sleep testing market.
- The departure of Philips has created a significant opportunity for CMP’s innovative new products.
- Sales orders taken in advance rose by 73% year-on-year, indicating strong future revenue potential.
- Management has guided for approximately $32m in revenue and $2.5m in profit for the second half, an improvement over the first half's $23.5m in revenue and $1.1m loss.
- Mereweather Capital continues to monitor CMP’s financials closely as they strive for recovery and growth.
Summary
Mereweather Capital
21 Nov 2022
$0.22
- Mereweather Capital acknowledges the significant impact of the pandemic on the medical device sector, particularly Compumedics (ASX: CMP).
- Post-pandemic recovery shows normalization of input prices and shipping lanes, with demand resuming.
- CMP's cumulative sales total $730m, with $620m generated offshore.
- The company operates in two segments: Diagnostic Medical Devices and Medical Innovation.
- Historically steady revenue for the core segment is between $35-40m with profits of $3-6m.
- Management guides for $40m revenue in FY23, indicating potential growth beyond record levels due to easing disruptions.
- The lower AUD may enhance profit margins compared to previous years.
- Upcoming Falcon home sleep testing device aims to expand into the home testing market.
- Mereweather Capital forecasts $41m revenue and $5m net profit from the core business in FY23.
- Medical Innovation includes developing technologies like Brain Imaging, eHealth, and Consumer Applications.
- Initial sales of MEG machines have occurred, with additional future sales expected.
- eHealth's Nexus 360 software shows steady growth contributing approx. $2m revenue.
- Efforts to penetrate the consumer sleep market via Somfit products are ongoing but present challenges.
- Current enterprise value is about $40m, and projected net profit is expected to be around $3-5m.
- Mereweather Capital sees significant upside potential from CMP's future growth opportunities.
Summary
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
ANALYST INSIGHT
Equity Research Analyst
"In a landscape where many are still reeling, Compumedics seems poised to awaken from its slumber. With supply chains stabilizing and innovative products on the horizon, this microcap med-tech could surprise investors as it capitalizes on a recovering market."
Last Updated: 31 Oct 2025
Query The Data
Frequently Asked Questions
Who is investing in Compumedics Ltd (ASX:CMP)?
Fund managers including Mereweather Capital have invested in Compumedics Ltd (ASX:CMP).
Why do fund managers invest in Compumedics Ltd?
Fund managers are investing in Compumedics Ltd due to its resilient core Diagnostic Medical Device segment, which is expected to recover post-pandemic, alongside promising growth opportunities in Medical Innovation. With a stable revenue base and the potential for increased profits driven by normalized supply chains and favorable currency conditions, Compumedics is positioned for significant growth. The company's innovative products, including the Falcon home sleep testing device and advancements in brain imaging technology, further enhance its appeal as a microcap med-tech with strong upside potential.
What happened to Compumedics Ltd (ASX:CMP)?
Fund managers have invested in Compumedics Ltd due to its growth potential despite operational challenges. The company's revenues have increased, driven by significant investments in sales and marketing, which have more than doubled in recent years. However, these expenses have led to operating losses and increased debt, prompting multiple capital raises. While some managers exited their positions after achieving short-term gains, the overall sentiment reflects a cautious optimism about Compumedics' long-term growth amidst ongoing financial adjustments.