Diagnostics Companies-After 2013 Financial Reporting
Stocks to Watch: Cepheid (CPHD), Exact Sciences (EXAS) , Orasure (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 (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 (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.