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Rod Raynovich
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Rod Raynovich is an entrepreneur and executive with a focus on life science companies and medical technology trends.He has over 30 years executive experience including Abbott and JNJ and has been involved three successful start-ups. He has a B.S, from Penn State University and an MBA from... More
My company:
Raygent Capital
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  • Clinical Diagnostic Companies 2013 Financial Metrics And Valuation Models 0 comments
    Mar 7, 2014 1:12 PM | about stocks: CPHD, EXAS, OSUR

    Diagnostics Companies-After 2013 Financial Reporting

    Stocks to Watch: Cepheid (NASDAQ:CPHD), Exact Sciences (NASDAQ:EXAS) , Orasure (NASDAQ:OSUR)

    • Price to Sales (P/S) is the best metric of value as many companies in the sector are not profitable.
    • Molecular diagnostics and genomics are the strongest growth sectors e.g. Cepheid (CPHD), ResponseGenetics (NASDAQ:RGDX).
    • Many stocks show a "topping effect" or are off their highs-momentum has eased.
    • Cepheid (CPHD) is one of the most expensive mid-cap players with limited earnings clarity.Potentially an acquisition for the big guys.
    • Exact Sciences (EXAS) valuation is totally dependent on FDA approval of their Cologuard CRC Test.
    • Point-of-Care rapid DX tests are in a growing market: Abaxis, Alere, Orasure and Quidel.
    • Orasure (OSUR) looks cheap on P/S and has new HIV and HCV Tests coming.
    • Hologic is in a restructuring mode with a new CEO. Last year they bought GenProbe.
    • Some of these stocks are long term M&A plays as per our previous picks: GenProbe, Immucor and SeraCare. ThermoFisher is a major acquirer and now large DX player.

    See The Rayno Top Picks and stock performance: Rayno DX and Tools.

    Big winners YTD are Nanostring Technologies (NSTG $19.81) up 15%, Illumina (ILMN $173) up 56.9%, and Vermillion (VRML $3.22) up 36.4%. Illumina (NASDAQ:ILMN) is a tools Company focused on DNA sequencing and is up a whopping 225% over one year. Illumina will be developing their sequencing technology for clinical diagnostic applications.

    Stayed tuned for 2014 update and rebalancing of picks.

    Selected Diagnostics Stocks-Financial Summary

    Company Ticker Price Rev RevQ4 Rev Price 2014 P/S PE PEG P/B Market  
        My'11 2012 2013 2013 5-Mar RevEst         Cap  
    GenProbe* GPRO 80 642 143 $-000- sold 66 576 5 64 1.9 700 $B  
                               
    Abaxis ABAX 28 179 40.8 176.4 38.8 203 4.3 51 5 4.6 0.862  
    Alere ALR 36 2,710 772 3,030 37 3,080 1 n/a n/a 2 3  
    Cepheid CPHD 31 331 113.3 401.3 54.25 457 8 n/a n/a 13 3.67  
    ExactSci EXAS   4.15 1 4.1 14.4 22.6 442 n/a n/a 7.4 1  
    GenomHlth GHDX 26 236 68.8 259.2 26.6 280 2.9 n/a n/a 5.6 0.823  
    Hologic HOLX   2,160 612.4 2,490 21.6 2,475 2.4 n/a n/a 3 5.93  
    Immucor** BLUD 20 345 83.3   sold 27 n/a 5.5 21 2.2 n/a n/a  
    Luminex LMNX 20 203 55.2 213.4 19.3 231 3.4 115 4.3 3 0.792  
    Meridian VIVO 23 179 44.8 188.7 20.8 201 4.2 23 2.3 5.4 0.846  
    NanostringT NSTG New   10.1 $31.50 19.9 46.5 6.3 n/a n/a 7.4 0.295  
    Nanosphere NSPH     3.4 10 2.52 20 9.4 n/a n/a 4.4 0.188  
    Neogen NEOG 41 194 59.6 225 45.5 242.5 6.9 61 3 5.9 1.67  
    Orasure OSUR   89.4 28.8 98.9 8.17 104.6 4 n/a n/a 2.6 0.411  
    Qiagen QGEN 20 1,250 363 1,310 22 1,370 3.9 115 16 2 5.12  
    Quidel QDEL 15 156 50.2 175.4 29 199 5 139 8 4.6 0.995  
    Resp Genet RGDX 2 18.1       22.2 3.1 n/a n/a n/a 0.06  
    Sequenom SQNM   71.5 45.1 162.4 2.34 214 1.3 n/a n/a n/a 0.276  
    SeraCare# SRLS 3.7 46.2 11   sold 4 43.5 1.8 36 n/a 40 n/a  
    Techne TECH 81 312 84 330 89.4 353 9.4 29 2.3 3.8 3,330  
    ThermoFish. TMO     3470 13,090 126 16,740 2.7 36 2.5 2.7 45,350  
    ** sold for $1.97B to TBG Capital #sold for $80M                
    * sold for $3.7B to Hologic Names in BOLD are on focus list          
                               

    Disclosure: I am long RGDX.

    Stocks: CPHD, EXAS, OSUR
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