Small-cap med-tech Novadaq (NASDAQ:NVDQ) has continued to have a rough go of it, with the shares down about a quarter since my last update
and down about a third over the past year. Investors are clearly
frustrated with the noise and turbulence caused by the company's
transition to a direct sales model, as well as spooked by the potential
entry of Stryker (NYSE:SYK) this year into a market that Novadaq had had all to itself.
It's
tough to advocate patience when a holding is deep in the red, but
Novadaq does at least have a good platform technology to market - the
company doesn't have to jump through hoops to make the argument that the
SPY platform can lead to significantly better patient outcomes,
including lower complication rates. What Novadaq does have to do,
though, is build out its sales force, place units, train surgeons, and
drive the recurrent revenue streams that the company needs to generate
high margins. A mid-teens fair value still seems reasonable to me today,
but this is likely a company that will be finding its way in 2015 and
that isn't often good news for a company's shares.
Continue reading here:
Novadaq Knocked Back By Looming Competition And A Tough Transition
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