With climate change and the impact we are having on the planet firmly back on the agenda following the latest United Nations Intergovernmental Panel on Climate Change’s special report, Neil Goddin co-manager of the Kames Global Sustainable Equity Fund outlines the reasons he favours these three stocks to make a difference.
Tomra – makes sorting and reverse vending machines. The big attraction is in the reverse vending. Tomra has an 80%+ share of the global market. In countries that already use reverse vending, recycling rates are well over 80% and often over 90%, even where laws to push for recycling targets are not yet in use.
With the European Union bringing in recycling targets and let’s face it huge a huge public appetite to stop seeing pictures of dead fish full of plastic on the news, recycling rates are a hot topic.
Road side pick-up simply does not produce good enough results. Not enough people do it and much of the waste is not recycled due to contamination. The only proven option is a deposit return scheme and this is what Scotland has just voted to do and the rest of the UK to follow suit shortly. We believe the evidence shows that the only viable way to mass collect the plastic bottles and cups is through such reverse vending machines. These machines will be located in shops and public buildings across the UK (and likely the rest of the world) and you simply put the bottle into the machine and receive the extra deposit you paid back. There is much proof that this works even without the deposit return scheme. Supermarkets across the UK have trialled a system where customers can receive point credits on their store card if they use the machines and collection efforts have been strong. Tomra will be front and centre of any adoption of these machines in the coming years.
DiaSorin – specialises in DNA testing for disease. It has found itself a niche by concentrating on more specialised tests that the bigger companies do not see enough volume in.
Why does this matter? Well there is a march towards molecular testing as it is far more automated, faster and thus cheaper than traditional methods of lab tests using a human and a petri dish. This means in the future we could go to the supermarket; take a DNA test and pick up results at the checkout till (although it might not be ideal for all diseases; depending on the seriousness). What is clear is demographics are only going in one direction and GDP across the globe is going in the opposite! We are close to breaking point in terms of healthcare costs. The recent trend has been to Value Based Care, so technologies like diagnostic testing will help drive down costs as well as giving faster and better outcomes to patients. DiaSorin and other diagnostic companies will be at forefront of these trends.
PeptiDream – is using Peptides (a form of amino acid which are necessary to make the body work efficiently), to revolutionise the Drug Discovery process. Peptides help drugs to target specific cells and tissues in the body, leaving the healthy cells alone and thus making side effects more avoidable. They also help to greatly reduce the Research & Development timeline, which has been a major issue in healthcare in recent years.
Multiple R&D partnerships, most recently a new relationship with Novartis point to PeptiDream’s strong position. It is likely to become a major market in the way we test new drugs in the future. Other partners include just about every major pharma company you can think of; Amgen, Astra, Bristol Myers, Bayer, Merck, Glaxo, Sanofi and many more. The recent drive to Peptides is largely driven by synthetics, traditionally the market has only looked at naturally occurring Peptides. The potential for targeted and specific synthetic Peptides is a potential game changer in the way certain diseases are fought.