VMSI..some alternate earnings play I had hit a buy signal.. have to check that one out, maybe just have announced. Nope they announce on the 21st. It was once an earnings play but went nowhere.
The Wall Street Transcript Publishes Small Cap Medical Technology Stock Issue
NEW YORK, Sept. 22 /PRNewswire/ -- Four leading analysts examine Small Cap Medical Technology Stocks, and 19 CEOs discuss their firms, in the latest issue of The Wall Street Transcript (212-952-7433). In a vital review of this sector for investors and industry professionals, this 98-page report features:
1) In an in-depth roundtable forum on Small Cap Medical Technology Stocks (11,000+ words), three leading analysts: Robert Faulkner of Hambrecht & Quist, Independent Analyst Michael Mullen and Frederick Wise of Bear Stearns & Co. examine management performances, overseas markets, regulatory outlook, reimbursement issues, physician acceptance of new products, Medtronic's acquisition of Xomed, contact lens market, veterinary health market and investing strategies.
The expert panel explores the competitive horizon, M&A activity, growth segments, investor sentiment, management performance and investor concerns. They analyze specific sector firms, and each analyst offers their recommendations with some stocks receiving a consensus of positive opinion, with the outlook for others disputed.
The market's genuine disinterest in many of these stocks is primarily due to the lack of execution by the companies, Mullen states. ''Management overpromised and underdelivered and investors were left very disappointed.''
There's a real dichotomy between the winners and losers, Faulkner declares. ''Some of the best performers -- by far -- in medical devices have been in this small and mid-cap range. But certainly the managements that have executed well and delivered or exceeded their promises have been amply rewarded; VISX (Nasdaq: VISX - news), Summit Technology (Nasdaq: BEAM - news), Xomed (Nasdaq: XOMD - news) and a number of other very exciting companies are trading at pretty vast multiples and have become darlings of Wall Street.''
It's not as though investors do not want to pay up for a small or mid-cap medical device company, Faulkner concludes. ''It's that they need to see a lot of evidence that these managements are executing and delivering the value. And if managements do that, they'll be paid amply for it.''
Following the announcement by Medtronic (NYSE: MDT - news) of its acquisition of Xomed, Wise states, ''Xomed has had excellent operating performance on a consistent basis and the stock has been a good performer. Companies whose management teams have communicated honestly and directly and that have met or exceeded expectations have done well.''
Echoing the theme of staying with strong management teams, Mullens asserts, ''I would focus on companies that are doing well right now. Quest Diagnostics (NYSE: DGX - news) is the leading independent clinical lab in the U.S., following its merger with the SmithKline's (NYSE: SBR - news) Clinical Labs. Here's a company whose organic growth is not terribly exciting. It may be 2-4% at best. But it dominates its respective markets. And the combination with SmithKline offers enormous cost-saving synergies. The earnings growth potential for this company is substantial over the course of the next two to three years. They also have a very, very strong management team, as demonstrated by the strong stand it took against SmithKline in its negotiations, almost canceling the deal a month ago, which would have hurt both companies, but was the right thing for them to do. That deal has closed now, and I think you've got a very undervalued situation that can deliver above-average returns for investors for at least a two-year period.''
The panel goes on to offer recommendations about which sector stocks are most likely to reward investors.
Investors should evaluate the strength of a firm's market position and intellectual property position, Mullens says. ''I would own Novoste (Nasdaq: NOVT - news), which has an intellectual property portfolio that we think positions the company well if radiation therapy proves to become a standard of care in treating restenosis. That portfolio will be of considerable value to a number of the strategic acquirers.''
Making his case for investors to look at MiniMed (Nasdaq: MNMD - [eds. comment a personal favorite] Faulkner offers, ''It's a dominant franchise with no visible limit on its growth in the next several years. They have 80% market share in the U.S., they are raising prices, growth has been accelerating to the high 50% range for pump placements, and add to that their remarkable pipeline of everything from insulin cartridges, on which they can make money, to a blood glucose sensor, to a type-2 patch-type pump.''
Wise states, ''Two of my favorites right now are Ventana (Nasdaq: VMSI - news) and IDEXX Labs (Nasdaq: IDXX - news). I think it's a great time to be buying both, because both companies have terrific products, unique franchises, they are real companies, and both have the potential for above-average growth.'' |
