High Conviction Entry: Pro-Dex $PDEX

Market hasn't reacted to high visibility 3Y growth

Pro-Dex manufactures components for medical devices, primarily for orthopedic surgery. 70% of their revenue comes from one customer: Stryker (ticker $SYK). Their current contract with Stryker expires at the end of this year. On Friday they announced a renewed contract through 2028, including minimum purchase volumes that put a floor on the stock.

Pro-Dex’s valuation lags peers because of this customer concentration risk. However, the market hasn’t reacted since the risk was defused on Friday. Therein lies the opportunity.

I bought a 4% postion just under $45 at open today. The price has already run a bit. Follow-up post to come with my thesis for the company as a long-term hold. Just wanted to get this post out quickly as the entry opportunity may not last long. Cheers!