Here's the url for the Barrons article and the relevent part from it. Putting this on my 'watch list' for now a will be lurking here. jk
barrons.com
>> Kam: We like a company called Endosonics. They have a
technology for looking at arteries from the inside. For
years, they struggled. They had a triumph of technology,
which didn't meet a market need. Then, about two years ago,
Johnson & Johnson developed a cardiac stent. A stent is a
little coil a cardiologist can implant in an artery to
physically hold it open and prevent it from collapsing.
During a trial in Italy two years ago, a doctor discovered
that if you don't fully expand the stent, blood clots on it.
If a clot detaches and ends up in your brain, it can cause a
stroke. The only way you can tell if the stent is fully
deployed is if you use a catheter--like the one Endosonic
makes--after you place the stent. It's a fundamental change.
The stent went from annual sales of zero to half a billion
dollars in a year. Sales of these ultrasound catheters are
following the same ramp.
Q: Impressive.
Kam: But you'd have never known it looking at the share
price. For the first time, two years ago, Endosonic's
product finally met a real need. Their sales have been
growing 60%-70% a year ever since, and they just had their
first profitable quarter. Having run one of these
businesses, I know they have high fixed costs. When you hit
break-even, incremental sales are very profitable. In the
next few quarters, if this company continues to grow 70%, a
lot of those incremental sales dollars will drop to the
bottom line. That's when people will discover it. << |
