Since it seems to be accepted practice now to accuse anyone who doesn't
think your stock is a screaming buy today with being "secretly short",
let me be very clear from the get-go - I like Endologix (ELGX)
quite a lot as a company, I think the company's technology is
innovative, and I see the company as both a share-gainer in endovascular
AAA treatment and one of the best growth stories today in med-tech. All
of that said, I don't see it as a bargain unless/until a larger
med-tech company decides that it must have it as its own.
Please continue here:
Endologix Shows How Growth-Hungry Med-Tech Investors Are
Showing posts with label Cook Medical. Show all posts
Showing posts with label Cook Medical. Show all posts
Sunday, March 31, 2013
Tuesday, February 21, 2012
Seeking Alpha: Spectranetics Still Searching For Traction In Peripheral
After so many years, it's interesting to see that there are still a few sell-side analysts willing to stick their heads out and support Spectranetics (SPNC). More than 25 years into its life as a medical device company, Spectranetics has yet to really carve out much more than niche applications for its laser ablation products. While the company may at last be in place to deliver some meaningful cash flow leverage, it looks like valuation is already ahead of the story.
Double-Digit Growth In Q4
Spectranetics delivered 11% growth in the fourth quarter, with 12% growth in its lead management business and 13% growth in its vascular business. Sales of disposables rose more than 12%, and the company placed an additional 8 laser units in the field (taking the total north of 1,000). To be fair, that's quite a good result when compared to other peripheral vascular companies like Bard (BCR), Covidien (COV), and Cardiovascular Solutions (CSII).
Please continue here:
Spectranetics Still Searching For Traction In Peripheral
Double-Digit Growth In Q4
Spectranetics delivered 11% growth in the fourth quarter, with 12% growth in its lead management business and 13% growth in its vascular business. Sales of disposables rose more than 12%, and the company placed an additional 8 laser units in the field (taking the total north of 1,000). To be fair, that's quite a good result when compared to other peripheral vascular companies like Bard (BCR), Covidien (COV), and Cardiovascular Solutions (CSII).
Please continue here:
Spectranetics Still Searching For Traction In Peripheral
Thursday, January 12, 2012
Seeking Alpha: This Bard's Tale Still Worth Hearing
Medical device manufacturer C.R. Bard (NYSE: BCR) has never been really owned for its exceptional growth potential or its exciting product lineup. What it has been appreciated for, though, is years of excellent free cash flow production, consistent performance, and a largely defensive portfolio of assets that has generated some of the best returns in the sector. While a poor operating environment has shown that Bard too is mortal, investors may yet want to consider this stock as a conservative addition to their portfolio.
One Of The Best Of The Rest
A great deal of attention in medical devices goes toward major product categories like coronary stents, cardiac rhythm management, and orthopedics, with the occasional hot growth story like surgical robotics or transcatheter heart valves. Where Bard excels, though, is in the “other” - a broad of array of devices that address significant medical issues, but just don't capture quite as much attention.
Read the full piece here:
This Bard's Tale Still Worth Hearing
One Of The Best Of The Rest
A great deal of attention in medical devices goes toward major product categories like coronary stents, cardiac rhythm management, and orthopedics, with the occasional hot growth story like surgical robotics or transcatheter heart valves. Where Bard excels, though, is in the “other” - a broad of array of devices that address significant medical issues, but just don't capture quite as much attention.
Read the full piece here:
This Bard's Tale Still Worth Hearing
Friday, January 6, 2012
Seeking Alpha: AngioDynamics Sorely Testing Investor Patience
Investors in small-cap med-tech not only expect growth, they demand growth. When a company delivers, like Abiomed (ABMD) or Intuitive Surgical (ISRG), investors happily bid the shares up to rich valuations. Where growth is lacking, so too are attractive multiples. Accordingly, any investor who approaches AngioDynamics (ANGO) with the thought that it is seriously undervalued needs to understand that this company absolutely has to start executing on growth initiatives.
Ups And Downs In Fiscal Q2
Revenue growth of nearly 9% in the fiscal second quarter actually puts AngioDynamics in pretty good shape relative to most interventional product companies, as procedure counts have yet to recover from the recession. U.S. growth was 6%, while international sales rose 27%. Looking at the segments, vascular continues to be weak (up just 2%) as a decent result in peripheral therapy offset declines in access. The company's oncology/surgery business continues to be a growth driver as NanoKnife sales doubled to over $3 million and overall segment sales rose 25%.
Read more here:
AngioDynamics Sorely Testing Investor Patience
Ups And Downs In Fiscal Q2
Revenue growth of nearly 9% in the fiscal second quarter actually puts AngioDynamics in pretty good shape relative to most interventional product companies, as procedure counts have yet to recover from the recession. U.S. growth was 6%, while international sales rose 27%. Looking at the segments, vascular continues to be weak (up just 2%) as a decent result in peripheral therapy offset declines in access. The company's oncology/surgery business continues to be a growth driver as NanoKnife sales doubled to over $3 million and overall segment sales rose 25%.
Read more here:
AngioDynamics Sorely Testing Investor Patience
Wednesday, August 18, 2010
Interesting Rumors Around Boston Scientific
It sounds like there are some interesting rumors bubbling up around Boston Scientific (NYSE: BSX) these days. With the stock in the toilet and little momentum in the business (but plenty of debt!) I am sure management is fielding quite a few "do something!" calls from our lovely and ever-so-patient friends in Hedge Fund-Land.
The first rumor is that BSX is about to sell its neurostim business to Stryker (NYSE: SYK). I saw this rumor in Bloomberg this morning, and talked with some friends in the industry. It all seems to make a fair bit of sense to us.
First, BSX has bigger fish to fry in its stent and CRM businesses, and has not really been doing all that great against Medtronic (NYSE: MDT) or St. Jude (NYSE: STJ) in that (neurostim) market. Like so many other niche businesses at BSX, this one too has suffered from neglect and under-investment.
For Stryker, this would offer another business platform and access to a market that has decent underlying growth. Now, I think the "synergy" that Bloomberg mentioned between Stryker's spine business and neurostim is a little silly (yes, back pain is a big indication for neurostim, but they do not go together quite so tightly), but the deal still makes sense. I happen to think that Stryker wants to add some more businesses to its portfolio, and most of the exciting ideas like Intuitive Surgical (Nasdaq: ISRG) or Nuvasive (Nasdaq: NUVA) are rather pricey.In buying BSX's neurostim business, Stryker could be getting an underappreciated fixer-upper that delivers good growth with just a little care and reinvestment.
Beyond the neurostim business, BSX is also apparently looking to jettison the neurovascular business. BSX has a very good franchise in treatments for cerebral aneurysms like embolization coils and they have been a major player for a number of years. This is interesting timing given that Johnson & Johnson (NYSE: JNJ) recently announced a deal for Micrus Endovascular (Nasdaq: MEND) - one of BSX's up-and-coming rivals.
What is BSX telegraphing here? Is the company saying, in effect, that only BSX's superior marketing abilities and long-term customer relationships were keeping them afloat and that MEND's products in the hands of JNJ's salesforce is too overwhelming to fight?
That is probably hyperbole, but it is an interesting development nonetheless. So who might buy this business? I would think Medtronic or St. Jude might give it a courtesy sniff, but I would expect the likes of Cook or Bard (NYSE: BCR) to be the more logical candidates right now. But who knows? Covidien (NYSE: COV) is out there buying every other damn thing, so maybe they will take a look too.
All in all, these are interesting developments at BSX. Does this mean the company is really circling the wagons and choosing to focus on major product categories like stents and CRM? Or is this just a process of cleaning out a few under-performing (but still marketable) businesses where a recovery is unlikely?
I am not sure yet, but I would keep a close eye too on whether they jettison the IVUS business. A sales of that business to a motivated buyer (like, say, GE (NYSE: GE) or Siemens (NYSE: SI)) would be bad news for Volcano (Nasdaq: VOLC). Volcano has great technology (the best, actually) and products, but they have clearly also benefited from BSX's unwillingness to support and develop the business any further. A sale to a new rival, then, would be a clear threat.
At the end of it all, though, I still would not be a buyer of BSX. But then, I am sort of accustomed to not liking BSX, so I do not pretend to be unbiased.
Disclosure - I own shares of JNJ
The first rumor is that BSX is about to sell its neurostim business to Stryker (NYSE: SYK). I saw this rumor in Bloomberg this morning, and talked with some friends in the industry. It all seems to make a fair bit of sense to us.
First, BSX has bigger fish to fry in its stent and CRM businesses, and has not really been doing all that great against Medtronic (NYSE: MDT) or St. Jude (NYSE: STJ) in that (neurostim) market. Like so many other niche businesses at BSX, this one too has suffered from neglect and under-investment.
For Stryker, this would offer another business platform and access to a market that has decent underlying growth. Now, I think the "synergy" that Bloomberg mentioned between Stryker's spine business and neurostim is a little silly (yes, back pain is a big indication for neurostim, but they do not go together quite so tightly), but the deal still makes sense. I happen to think that Stryker wants to add some more businesses to its portfolio, and most of the exciting ideas like Intuitive Surgical (Nasdaq: ISRG) or Nuvasive (Nasdaq: NUVA) are rather pricey.In buying BSX's neurostim business, Stryker could be getting an underappreciated fixer-upper that delivers good growth with just a little care and reinvestment.
Beyond the neurostim business, BSX is also apparently looking to jettison the neurovascular business. BSX has a very good franchise in treatments for cerebral aneurysms like embolization coils and they have been a major player for a number of years. This is interesting timing given that Johnson & Johnson (NYSE: JNJ) recently announced a deal for Micrus Endovascular (Nasdaq: MEND) - one of BSX's up-and-coming rivals.
What is BSX telegraphing here? Is the company saying, in effect, that only BSX's superior marketing abilities and long-term customer relationships were keeping them afloat and that MEND's products in the hands of JNJ's salesforce is too overwhelming to fight?
That is probably hyperbole, but it is an interesting development nonetheless. So who might buy this business? I would think Medtronic or St. Jude might give it a courtesy sniff, but I would expect the likes of Cook or Bard (NYSE: BCR) to be the more logical candidates right now. But who knows? Covidien (NYSE: COV) is out there buying every other damn thing, so maybe they will take a look too.
All in all, these are interesting developments at BSX. Does this mean the company is really circling the wagons and choosing to focus on major product categories like stents and CRM? Or is this just a process of cleaning out a few under-performing (but still marketable) businesses where a recovery is unlikely?
I am not sure yet, but I would keep a close eye too on whether they jettison the IVUS business. A sales of that business to a motivated buyer (like, say, GE (NYSE: GE) or Siemens (NYSE: SI)) would be bad news for Volcano (Nasdaq: VOLC). Volcano has great technology (the best, actually) and products, but they have clearly also benefited from BSX's unwillingness to support and develop the business any further. A sale to a new rival, then, would be a clear threat.
At the end of it all, though, I still would not be a buyer of BSX. But then, I am sort of accustomed to not liking BSX, so I do not pretend to be unbiased.
Disclosure - I own shares of JNJ
Monday, July 12, 2010
JNJ Paying Up For Quality
It was only a week ago that I wrote about Micrus Endovascular (Nasdaq: MEND) as a hot med-tech stock that investors should take a look at and consider for a growth-oriented portfolio. Well, I hope they looked quickly, because Johnson & Johnson (NYSE: JNJ) announced this morning that it was acquiring Micrus for $23.40/share in cash.
That is a total deal value of $480 million, but a rather small premium of only about 5%. The stock has had a strong run since mid-May, though, and some of the move from $16-and-change could have been a product of rumors and whispers about a deal. Given the relatively recent deal between Covidien (NYSE: COV) and ev3 (Nasdaq: EVVV), it seems even more probable that people were connecting the dots and assuming that MEND would get a bid.
Although I am a JNJ shareholder, I have ripped the company plenty of times for its M&A strategy -- the company often pays too much and gets too little.
I really actually do like this deal, though. First, JNJ is by no means overpaying. JNJ is paying about 4.2 times trailing sales for Endus, and that is a good price. Growing small-cap med-tech companies often normally trade at 4 or 5 times trailing sales, and buyout premiums usually push that to a 6-8x range.
Second, Micrus has good technology on the market that integrates nicely with Johnson & Johnson's existing neurovascular intervention business. Not only have Micrus's products shown strong clinical results, they have actually sold well in the market and become something of a threat to rivals like Boston Scientific (NYSE: BSX). In my analysis, then, the combination of MEND's high-quality embolization coils and JNJ's existing business is a strong one.
I have to say, though, that I wonder if these deal actually goes through at this price. There are several other companies that could make a lot of hay from the Micrus assets, and the deal price is not so high that these other companies could not come in with a sweeter offer. If you are a Micrus shareholder, that is something to look forward to; if you are a JNJ shareholder, it is something to dread.
Who else could get involved? How about Medtronic (NYSE: MDT), Cook, or Bard (NYSE: BCR)? Certainly BSX could be interested as well, but I doubt that they have the balance sheet liquidity to do the deal, and I really doubt that Micrus shareholders would be thrilled about getting BSX shares instead of JNJ cash.
At the bottom line, I had modeled that MEND was worth about $25 a share. Given that MEND's management was willing to take less than that, I wonder where my model might have been a bit too optimistic. In any case, that spread between my fair value and the deal price is what a former boss of mine would describe as "close enough for jazz", so I am not going to worry about it too much. Moreover, I have also felt that JNJ needed to get more aggressive in finding new growth opportunities, so this is a deal and a price than I can live with pretty happily.
I would still recommend investors buy shares of JNJ. I also wonder if MEND shares are not worth a shot as an arbitrage play - so long as you can get the shares at a price that will still leave you with a profit after commissions, it might be worth the gamble to see if another bidder appears.
Disclosure - I own shares of JNJ.
That is a total deal value of $480 million, but a rather small premium of only about 5%. The stock has had a strong run since mid-May, though, and some of the move from $16-and-change could have been a product of rumors and whispers about a deal. Given the relatively recent deal between Covidien (NYSE: COV) and ev3 (Nasdaq: EVVV), it seems even more probable that people were connecting the dots and assuming that MEND would get a bid.
Although I am a JNJ shareholder, I have ripped the company plenty of times for its M&A strategy -- the company often pays too much and gets too little.
I really actually do like this deal, though. First, JNJ is by no means overpaying. JNJ is paying about 4.2 times trailing sales for Endus, and that is a good price. Growing small-cap med-tech companies often normally trade at 4 or 5 times trailing sales, and buyout premiums usually push that to a 6-8x range.
Second, Micrus has good technology on the market that integrates nicely with Johnson & Johnson's existing neurovascular intervention business. Not only have Micrus's products shown strong clinical results, they have actually sold well in the market and become something of a threat to rivals like Boston Scientific (NYSE: BSX). In my analysis, then, the combination of MEND's high-quality embolization coils and JNJ's existing business is a strong one.
I have to say, though, that I wonder if these deal actually goes through at this price. There are several other companies that could make a lot of hay from the Micrus assets, and the deal price is not so high that these other companies could not come in with a sweeter offer. If you are a Micrus shareholder, that is something to look forward to; if you are a JNJ shareholder, it is something to dread.
Who else could get involved? How about Medtronic (NYSE: MDT), Cook, or Bard (NYSE: BCR)? Certainly BSX could be interested as well, but I doubt that they have the balance sheet liquidity to do the deal, and I really doubt that Micrus shareholders would be thrilled about getting BSX shares instead of JNJ cash.
At the bottom line, I had modeled that MEND was worth about $25 a share. Given that MEND's management was willing to take less than that, I wonder where my model might have been a bit too optimistic. In any case, that spread between my fair value and the deal price is what a former boss of mine would describe as "close enough for jazz", so I am not going to worry about it too much. Moreover, I have also felt that JNJ needed to get more aggressive in finding new growth opportunities, so this is a deal and a price than I can live with pretty happily.
I would still recommend investors buy shares of JNJ. I also wonder if MEND shares are not worth a shot as an arbitrage play - so long as you can get the shares at a price that will still leave you with a profit after commissions, it might be worth the gamble to see if another bidder appears.
Disclosure - I own shares of JNJ.
Tuesday, June 1, 2010
Covidien Shuffles The Deck
One of the least-surprising take-outs I've seen was today's announcement that ev3 is getting bought out. That said, I'm not sure you could have found 10 people who would have put Covidien in the top three most likely buyers. Bard would have made sense to me, as well as Cook or even Boston Scientific or JNJ. But Covidien?
Strange times...
By the way, I do own shares of JNJ.
Medical technology companies, particularly the larger ones, tend to be quite acquisitive. So, another sign that normalcy may be returning to the economy and the market is when acquisitions start to tick up again. The good news is, this appears to be happening now. In the wake of the Medtronic (NYSE:MDT) and ATS Medical deal a little while ago, Tuesday saw the announcement of a larger deal between Covidien (NYSE:COV) and ev3 (Nasdaq:EVVV).
For the full article, please continue on to:
http://stocks.investopedia.com/stock-analysis/2010/Covidien-Shuffles-The-Deck-COV-EVVV-MDT-CSII-SPNC-BSX-MEND0601.aspx
Strange times...
By the way, I do own shares of JNJ.
Medical technology companies, particularly the larger ones, tend to be quite acquisitive. So, another sign that normalcy may be returning to the economy and the market is when acquisitions start to tick up again. The good news is, this appears to be happening now. In the wake of the Medtronic (NYSE:MDT) and ATS Medical deal a little while ago, Tuesday saw the announcement of a larger deal between Covidien (NYSE:COV) and ev3 (Nasdaq:EVVV).
For the full article, please continue on to:
http://stocks.investopedia.com/stock-analysis/2010/Covidien-Shuffles-The-Deck-COV-EVVV-MDT-CSII-SPNC-BSX-MEND0601.aspx
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