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Steve Hach is the Senior Editor at ValuEngine.com, a Newtown, Pennsylvania-based stock valuation and forecast service. ValuEngine utilizes Ivy League financial research as the basis for its coverage of more than 7000 US, Japanese, and Canadian, and other foreign stocks. Hach utilizes... More
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  • ValuEngine Diversified Growth Strategy Long Pick Abiomed ($ABMD,ABMD) Provides Huge Return 0 comments
    Nov 9, 2011 1:07 PM | about stocks: ABMD

    ValuEngine Diversified Growth Strategy Long Pick Abiomed ($ABMD,ABMD) Provides Huge Return


     

    Abiomed, Inc. is a developer, manufacturer and marketer of medical products designed to safely and effectively assist or replace the pumping function of the failing heart. The company currently manufactures and sells the BVS-5000, a temporary heart assist device, which is approved by the U.S. Food and Drug Administration for the temporary treatment of all patients with failing but potentially recoverable hearts. The company is also engaged in research and development relating to other devices to support the pumping function of the heart.


     

    The ticker was an alternate long selection for our ValuEngine Forecast 16 Market Neutral Strategy Portfolio in October and since the rebalance on the 17th of that month the stock is up more than 55%. The company 's most recent earnings report included a huge beat of @120%--earnings of $0.02/share vs expectations of a lost per share of $0.09. The company had record revenue and profitability for the Q2 period. Shares rallied big time on this news. However, the models are not as impressed with the stock at these sorts of valuations and no longer rate the company a BUY. It is expected that it will no longer be a selection in the upcoming portfolio.


     

    ValuEngine has issued a HOLD recommendation for ABIOMED INC on Nov. 09, 2011. Based on the information we have gathered and our resulting research, we feel that ABIOMED INC has the probability to ROUGHLY MATCH average market performance for the next year. The company exhibits ATTRACTIVE momentum and expected EPS growth, but UNATTRACTIVE market valuation and market/book ratio.

    Based on available data as of Nov. 09, 2011, we believe that ABMD should be trading at $15.12. This makes ABMD 27.54% overvalued. Fair Value indicates what we believe the stock should be trading at today if the stock market were perfectly efficient and everything traded at its true worth. For ABMD, we base this on actual earnings per share (NYSEARCA:EPS) for the previous four quarters of -$0.24, forecasted EPS for the next four quarters of $0.02, and correlations to the 30- year Treasury bond yield of 3.10%.

    ValuEngine Forecast

     

     

     

    Target Price*

    Expected Return

    1-Month

    19.28

    -0.07%

    3-Month

    19.36

    0.34%

    6-Month

    18.96

    -1.70%

    1-Year

    18.82

    -2.41%

    2-Year

    18.96

    -1.69%

    3-Year

    19.77

    2.46%

     


     

    MARKET OVERVIEW

    Summary of VE Stock Universe

    Stocks Undervalued

    74.21%

    Stocks Overvalued

    25.79%

    Stocks Undervalued by 20%

    39.15%

    Stocks Overvalued by 20%

    7.21%

     

    SECTOR OVERVIEW

    Sector

    Change

    MTD

    YTD

    Valuation

    Last 12-MReturn

    P/E Ratio

    Aerospace

    0.64%

    4.66%

    7.92%

    13.66% undervalued

    3.38%

    18.27

    Auto-Tires-Trucks

    0.41%

    4.48%

    -26.16%

    16.25% undervalued

    19.79%

    22.4

    Basic Materials

    0.64%

    6.79%

    -15.57%

    14.68% undervalued

    -5.15%

    29.43

    Business Services

    0.72%

    4.92%

    -3.22%

    13.82% undervalued

    0.94%

    22.27

    Computer and Technology

    0.97%

    3.67%

    -4.46%

    14.82% undervalued

    4.21%

    35.75

    Construction

    2.03%

    5.60%

    -20.33%

    21.57% undervalued

    -14.47%

    33.61

    Consumer Discretionary

    1.37%

    4.28%

    -8.08%

    15.60% undervalued

    -2.17%

    32.16

    Consumer Staples

    1.21%

    3.27%

    -12.53%

    9.12% undervalued

    -4.12%

    18.18

    Finance

    1.23%

    4.54%

    -6.04%

    14.42% undervalued

    -4.46%

    19.16

    Industrial Products

    0.86%

    5.21%

    -11.92%

    12.05% undervalued

    -0.33%

    21.09

    Medical

    1.13%

    4.61%

    -2.01%

    21.02% undervalued

    -0.64%

    26.86

    Multi-Sector Conglomerates

    -0.44%

    3.96%

    -9.82%

    8.98% undervalued

    -2.14%

    21.48

    Oils-Energy

    1.06%

    5.61%

    -13.21%

    14.09% undervalued

    10.17%

    34.21

    Retail-Wholesale

    0.74%

    4.11%

    1.36%

    10.24% undervalued

    10.06%

    24.26

    Transportation

    1.07%

    3.72%

    -12.21%

    11.94% undervalued

    -7.05%

    26.6

    Utilities

    0.86%

    3.55%

    9.59%

    4.84% undervalued

    3.64%

    21.53


     

    Stocks: ABMD
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