The Ansell Limited (ASX: ANN) share price has increased over 15% since the start of 2019 to trade at $25.50 at the close on Friday afternoon. Ansell's share price has experienced a slow but persistent climb since 2016 when it traded at $15.04 per share, which is around the same price it traded at back in 2012.
Ansell is a global leader in manufacturing safety products for the healthcare and industrials industry. Some of its products include examination and surgical gloves for the medical industry and heavy-duty protective gloves for the industrials industry. In 2017, Ansell sold its condom manufacturing business.
Ansell has announced a major transformation program to the company. Some of these changes include the development of a streamlined organisational structure and additional investment into a global supply chain. Ansell's program is estimated to cost up to $100 million USD but at the same time, is expected to reduce operating costs by $30 million USD in 2020.
Provided Ansell's transformation program stays on track (shareholders would be pleased to know that it's currently ahead of schedule), the share price is likely to respond in time.
Ansell's recent half-year results show promise
Compared to the previous half-year report, Ansell performed below expectation in the European market, but this deficit was offset with a strong performance in the United States. Industrial and healthcare growth showed increases of 6% and 3.8%, respectively.
Despite overall sales increasing, the profitability ratios slightly decreased. Part of this could be due to political factors such as the US-China trade war and the effect of Brexit in Europe. Although Ansell experienced a decrease in its profitability ratios, emerging markets showed increasing growth. India has a strong positive outlook and is one of the fastest population growth countries in the world. With economic power shift being a megatrend forecasted for the future, Ansell is well positioned to take advantage of the E7 economies.
Currently, Ansell's share price trades at a PE ratio of 23.44 which is a significant discount to its industry of 35.79. It's holding an appropriate debt to equity ratio of 40% and a dividend payout ratio of 56%. Ansell's half-year announcement reports that it is on track to reward shareholders with its 16th consecutive year of dividend increases.
Foolish takeaway
Ansell is less affected by the slowing domestic economy as the revenues from overseas comprise more than 85% of its total revenues. Currently Ansell's share price shows value, especially if it manages to complete its transformation program ahead of time. I think Ansell's share price could reach the $30 mark to establish a new all-time high.
