Seeking Alpha

Rod Raynovich's  Instablog

Rod Raynovich
Send Message
Rod Raynovich is an entrepreneur and executive with a focus on life science companies and medical technology trends.He has over 35 years executive experience including Abbott and JNJ and has been involved three successful start-ups. Before starting Raygent and other companies he was also a... More
My company:
Raygent Capital
My blog:
Raygent.com,Rayno Life Science
  • Life Science Diagnostics And Tools Stocks Still Have Growth Potential 0 comments
    Mar 7, 2013 4:57 AM | about stocks: CPHD, ILMN, GHDX, QDEL, CSII

    Sector Drivers include Technology Innovation and M&A

    The Life Science Tools and Diagnostics sector is important for diversification of any biotechnology portfolio.The stocks are less volatile than biopharmaceuticals and less driven by momentum players because the companies are more dependent on financial metrics especially revenue growth. Nonetheless many stocks in our portfolio outperformed the IBB up 12% YTD, which is heavily weighted toward drugs. All of the earnings for 2012 have been announced so the stocks reflect Q4 2012 metrics.Sector growth rates are in the 7% range and 9% range for diagnostics,We will update the financials for the sector next week as we did in Q3 2012.

    Molecular diagnostics is a major growth segment in a $5B market and our focus stocks are Cepheid (NASDAQ:CPHD), Qiagen (NASDAQ:QGEN) and Quidel (NASDAQ:QDEL). Sequencing is expected to be an important area for innovation for genetic analysis and clinical applications are expected. Illumina (NASDAQ:ILMN) is our top pick.

    Here are some of the highlights for the portfolio as of Q1 2013 YTD:

    • The top performers YTD were Alere (ALR $23.4) a $1.9B market cap, point of care diagnostic value play and Quidel a growth stock and leading provider of rapid diagnostic test for infectious diseases.
    • ThermoFisher (NYSE:TMO) was up 17.9% and has proven to be on of the best financial managers with revenues at $3.26B for 2012 and now seeking acquisitions in diagnostics.
    • Five of our focus companies have been acquired over the years and many of our picks have M&A potential.
    • Many of our smaller cap stocks have underperformed: EXAS, RGDX, SQNM. Exact Sciences (NASDAQ:EXAS) will be presenting data on their colorectal cancer screening test next month.
    • Genomic Health (NASDAQ:GHDX), a pure play in personalized medicine for cancer therapy was added last week. The stock has been a laggard but has a unique genomic based data platform for personalized treatment decisions.
    • Cardiovascular Systems (NASDAQ:CSII) is a small cap growth Company that offers treatment systems for PAD in cardiovascular disease. The stock has doubled since we added it two years ago.
    • Macro issues that may impact 2013 financials are : test reimbursement, regulatory such as LDTs (Lab devloped Tests), NIH funding and emerging market growth.
     

     

    2010-2013 OriginalPricePrice% PricePrice% RETPrice%RET 
      Recomm Dec'10Ret 10/2/121/2/131 yr3/6/13YTD 
                 
    AbaxisABAX2/2/091526.979 37.937.836.74313.5 
    CardioV.Sys.CSII11/5/107.1511.763 11.451329.71623 
    CeleraCRA3/28/1076.318 acquired     
    CepheidCPHD10/23/1231.4   NEW35.513374.2 
    Exact SciEXAS12/10/105.65.986.8 11.36113610.86-1.2 
    GenomicHGHDX2/26/1328.5NEW   27.246.328.65.1 
    GenProbeGPRO2/2/094558.430 82.55acquired   
    IlluminaILMN2/2/092963.3118 51.255.481.853.7-3 
    ImmucorBLUD4/5/102019.80 acquired     
    AlereALR2/2/092536.646 19.6419-1823.523.7 
    MicroFluidicsMFLU7/6/100.771.3474 acquired     
    NeoGenNEOG7/2/10264158 42.845.648.846.151.3 
    QiagenQGEN3/15/1021.519.6-9 1918.8362112.2 
    QuidelQDEL6/16/1012.414.516 18.6519.931.324.723.6 
    ResponseGRGDX2/3/121.5NEW  1.31.4-131.21-14 
    SequenomSQNM11/18/093.758.03114 3.54.9310.84.44-10 
    SeraCareSRLS11/18/092.754.7573 acquired     
    ThermoFishTMO7/25/1253.5NEW  59.46544.576.6517.9 
                 
                 

    Disclosure: I am long ALR, CSII, CPHD, ILMN, QDEL, RGDX. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Back To Rod Raynovich's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
Full index of posts »
Latest Followers

StockTalks

More »

Latest Comments


Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.