Stephen Simpson, CFA
Long only, growth at reasonable price, value, research analyst

For Meridian Bioscience, Living Up To The Past Could Prove Challenging

Small-cap diagnostics company Meridian Bioscience (NASDAQ:VIVO) is a curious study in quality and growth and how Wall Street processes those attributes. Meridian has built up a very strong testing business, with high-quality rapid point of care tests and a very cost-effective molecular diagnostics platform. Moreover, this company has posted a trailing compound annual revenue growth rate of 10% with returns on invested capital often above 20%. Yet, the stock has had some pronounced choppiness and is only up about 16% over the past five years - significantly lagging rivals like Cepheid (NASDAQ:CPHD) and Quidel (NASDAQ:QDEL).

I am concerned that there may be too much optimism baked into current expectations. I believe that Meridian is...

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