Convatec Makes Steady Progress on Turnaround, but Reimbursements Cloud Midterm

Since its initial public offering, ConvaTec has followed a familiar playbook to press its advantage in advanced wound care and to enhance its ostomy and continence care businesses. By and large, we like ConvaTec's businesses that focus on chronic care, which translates into an ongoing stream of revenue from relatively concentrated global markets. However, the company stumbled badly out of the gate and lagged significantly behind its key competitor, Coloplast. Fortunately, a change in management has led to notable progress to remedy this situation.