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Rayno Dx And Tools 2014 YTD After Correction: ILMN, HOLX, RHHBY

|Includes:Hologic, Inc. (HOLX), ILMN, RHHBY

April Sell-Off Hit Diagnostic Small and Mid Caps

The bursting of the biotech bubble affected many small cap growth stocks. 2013 was a great year for our portfolio so some weakness was expected after the huge Q1 2014 moves. Most of our picks peaked in Jan/Feb time frame when many of our favorites were hit hard by profit taking. Follow technicals before adding new positions and watch small cap ETFs such as IWM ($111), IWO ($127) and VBK ($118.7) all down 3-5% YTD for recovery.

  • Cepheid (NASDAQ:CPHD) peaked in March in the $55 range. It is holding the ~$40 bottom but is still expensive. It is a leading molecular Dx player with M&A potential.
  • Cardiovascular Systems (NASDAQ:CSII) had a blow-off top near $37 and is down 24.5% YTD. Still a growth stock but wait for $24-26 gap to fill.
  • Quidel (NASDAQ:QDEL) is down 29% YTD after a big revenue and earnings miss. Will need time to recover.
  • Response Genetics (NASDAQ:RGDX) was crushed after missing revenues again. Nothing to do here but hold for LT recovery.

The life science sector is still very attractive long term per all of our previous posts because of important trends : companion diagnostics, pharmaco-genomics,sequencing, point of care Dx and molecular Dx.

  • Illumina Inc. (NASDAQ:ILMN) is a long term play in sequencing and has 90% of the market with ThermoFisher(NYSE:TMO) as the only major competitor. It is a momentum stock that was hit by profit taking in $180 range but is starting to recover. Strong hold with a buy on weakness.
  • Sequenom Inc.(NASDAQ:SQNM) and Vermillion (NASDAQ:VRML) have both recovered and are always good for trades. Strong holds.
  • Hologic Inc. (NASDAQ:HOLX) is a restructuring play with a reiterated buy in low $20s.
  • RocheHoldings (OTCQX:RHHBY) is a leading mega-cap drug and diagnostic core holding in a life science portfolio.
  • Trinity Biotech plc (NASDAQ:TRIB) was added at $24.75.

A review of Q1 financial reporting will follow this week. Q to Q revenue growth is key for all of these stocks.

Rayno Diagnostics and Tools 2014

2010-2014   Original Price Price % Price % RET Price'13 %RET Price'14 % RET
DX and Tools Recomm   Dec'10 Ret 1/2/13 2013 Nov12. YTD May 22. YTD  
                         
Abaxis ABAX 2/2/09 15 26.85 79 37.8 36.7 35.45 -4.45 41.6 4  
CardioV.Sys CSII 11/5/10 7.2 11.66 63 13 29.7 29.5 135 25.85 -24.5  
Cepheid CPHD 10/23/12 31     35.5 13 41.97 24 42.6 -8.7  
Exact Sci EXAS 12/10/10 5.6 5.98 6.8 11 36 11.52 8.78 13.77 17  
GenomicH GHDX 2/26/13 29     27.24 6.3 34.45 26.5 26.9 -8.2  
GenProbe GPRO 2/2/09 45 58.35 30 acq            
Hologic HOLX* 4/9/13 22     20   20.51 2.5 23.85 6.76  
Illumina ILMN 2/2/09 29 63.34 118 55.4 81.8 96.52 73.6 155.9 41  
Alere ALR 2/2/09 25 36.6 46 19 -17.7 33.57 81.5 35.3 -2.43  
NeoGen NEOG 7/2/10 26 41.03 58 45.6 48.8 46.78 3.22 37.1 -18  
NanoString NSTG 11/21/13 12         11.3   14.8 -15  
Qiagen QGEN 3/15/10 22 19.55 -9 18.8 36 22.95 26.5 22.5 -5.3  
Quidel QDEL 6/16/10 12 14.45 16 19.9 31.3 24.55 31.5 21.65 -29.9  
ResponseG RGDX 2/3/12 1.5     1.4 -12.9 1.25 -10 0.9 -22.4  
RocheHold RHHBY 1/30/14 67             37.44 6.7  
Sequenom SQNM 11/18/09 3.8 8.03 114 4.93 10.8 2.29 -51.4 2.83 20.9  
ThermoFish TMO** 7/25/12 54     65 44.5 97.69 53 116 4.1  
Vermillion VRML 5/15/13 2.5     1.37 73 2.54 92 2.94 24.6  
                         
*HOLX acq GPRO                      
**TMO acq LIFE                      
                         
                         
                         
Click to enlarge

Disclosure: I am long HOLX, RHHBY, RGDX, TRIB.

Stocks: HOLX, ILMN, RHHBY