Global leader in personal hearing devices, Nuheara Ltd [ASX:NUH] has seen an impressive surge in their share price this morning, up 15.63% within the first hour of trading.
The spike coincides with the news of the company being approved as a registered provider to Australia’s National Disability Scheme (NDIS), effective immediately.
At time of writing, Nuheara shares are trading at 3.8 cents, up 18.75% from yesterday.
It’s whopping gains like this that can make the small-cap region of the stock market so exciting.
Of course, the small size of these stocks also means share price can move just as quickly in the opposite direction.
So you need to make smart decisions when it comes to which small-caps you grab a stake in.
Today we’ll discuss the potential of Nuheara to become a lucrative small-cap.
Improved reputation within a niche market
Being a registered provider for the NDIS means the organisation can subsidise Nuheara product purchases.
The entire Nuheara product range will be available for purchase under the Hearing Equipment category in the NDIS, aiming to target support for people with autism.
This tight focus stems from Nuheara’s IQBuds Boost product appearing to significantly improve auditory attention of those with Autism, as witnessed in a recent study.
Having the NDIS registration will therefore give Nuheara products both choice and purchasing power within the Assistive Technology market.
CEO Justin Miller says the NDIS registration ‘places Nuheara at the centre of hearing health care beyond mild hearing loss’
‘It dramatically expands our reach…and further validates Nuheara’s decision to only develop and market products that focus on disrupting the global hearing healthcare market’.
Expanded reach is certainly a plus, particularly considering how niche Nuheara’s target market is.
How niche is too niche?
At the end of 2018, Nuheara made a ‘strategic shift’ away from Bluetooth-type hearing tech in favour of more unique forms of hearing devices.
The aim is to provide hearing solutions ‘to the people who are not being serviced with traditional hearing solutions today’.
This bracket are considered those who ‘are not quite ready for a hearing aid’, but do indeed suffer from some hearing loss.
Nuheara have labelled this the ‘underpenetrated mil to-moderate hearing loss market’, with this latest NDIS registration giving the company potential for global expansion.
And it certainly does appear to be the move they were hoping for from the $1 million invested into research, manufacturing, advertising and marketing, in the June quarter.
But considering Nuheara are still down 47.22% on their one-year return, it’s hard to say whether the company will indeed break out of the small-cap sector any time soon.
Worth keeping an eye on, though.
For Money Morning
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