The company's net income was up 55% and 20% YOY respectively in 2004 and 2005 and while annual revenue has remained flat, the company carries no long term debt and is sitting pretty on $108 million in cash. Vital Signs is a tightly run company, with controlled costs and a high percentage of insider and institutional ownership. The current CEO Terence Wall, is also the founder of the company and despite his status within Vital Signs, he makes a base pay less than that of the lowest paid of the 4 top execs at Respironics.
Despite being a smaller player than Respironics (their major competitor), they have not only gained market share, but also kept their profit margins and operating margins much higher than Respironics.
Technically, the chart of Vital Signs is a thing of beauty. It recently bounced off its 200 day moving average and stands at around 10% off its all-time high. Historically, VITL has had a tendency to trade at up to 25 times earnings, which means if earnings growth remains at the currently estimated 13%, the stock may have another 10% upside from these levels. There is one happy exception though - the company gets bought out - in which case, it could move 15-20% in a single day.
VITL 1-yr chart: