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Stereotaxis Is Back To Stay

Mar. 09, 2018 3:30 PM ETStereotaxis, Inc. (STXS)17 Comments
Giancarlo Nicoli profile picture
Giancarlo Nicoli


  • Strong balance sheet after $10.0 million non-dilutive financing.
  • Positive operating income (Excluding a non-cash inventory-related charge).
  • Two quarters in a row of recurring revenue growth.
  • Procedures for the full-year 2017 grew 3% over the full-year 2016, the first year of annual procedure growth since 2012.

I follow Stereotaxis (NYSE:STXS) since 2006. I bought my first shares in 2008, then subsequently added a couple of times, before the final collapse you can see in the chart below, circa 2012. I have been down 97% overall. It's been not pretty.

I bought a few new shares recently.

Why did I buy? What's my investment thesis? What changed?

A broader overview of Stereotaxis

Stereotaxis has developed and is commercializing a suite of robotic technologies that enable better treatment of cardiac arrhythmias. Cardiac arrhythmias are common conditions, where the heart beats irregularly. Tens of millions of individuals in the developed world suffer from arrhythmias, prevalence is growing rapidly, and when left untreated, arrhythmias increase the risk of stroke, congestive heart failure and sudden death. (Source: Q4 2017 Results - Earnings Call Transcript).

A Very Short History Of Stereotaxis

Stereotaxis had, since inception, strong products and strong competitive advantages over the competition. On the other hand, it had poor overall execution and a weak balance sheet. There's been a time when it looked like this Company was going to flourish:

Stereotaxis, Inc. stock price vs. S&P 500 - Y 2013

It didn't last much. Sales did not cover expenses, debt soared; so, in 2016, existing shareholders were almost completely wiped out and new shareholders brought in some much needed fresh capital.

With new shareholders, also new board members and management came in.

Stereotaxis' competitive advantages

I will let David Fischel - Chairman and Chief Executive Officer, speak:

The primary therapies prescribed to arrhythmia patients include pharmaceuticals, implantations of pacemakers, ICDs and cardiac ablation procedures. Cardiac ablation refers to a minimally invasive procedure, where a catheter is introduced into the vein in the upper leg of a patient and then snaked up several feet into the heart chamber. The tip of the catheter delivers a blade of energy to specific parts of

This article was written by

Giancarlo Nicoli profile picture
I work as a community pharmacist and I work and live in Northern Italy. My interests are not limited to: dividend and biotechnology investing. I enjoy to share my experience: I write about things where I have skin in the game.

Analyst’s Disclosure: I am/we are long STXS. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Material presented here is for teaching and entertaining purposes only. It is not intended to be taken as financial advice, a recommendation to buy or sell the stocks mentioned above. Investing includes risks, including loss of principal.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (17)

NDHT profile picture
Wow, the last article on this company from the SA was four years ago.

I am only 80% down :-). Hope I will see a five fold increase to break even. You never know.
Giancarlo Nicoli profile picture
I lost so much money.
Also, no light at the end of the tunnel for a very long time.
They reported two quarters in a row of recurring revenue growth. That's what I was waiting for all those years.
@NDHT I hope you held. Target for me is 9.50.
NDHT profile picture
@Brian Thrasher Yes I did until recently. Patience did pay off. Best luck with you!
I like this company a lot. i think one paycheck worth of savings invested into this company is probably not a bad idea. If Medtronic partners with Corindus, then this would be the next logical partnership.

I do struggle with how they think the market for this product is 4B in size. who owns the remaining 3.97B they don't have?
Giancarlo Nicoli profile picture
@ moneyball222,
I guess yours is a rhetorical question.
Anyway, total market size is catheters. Of course STXS owns 100% of the much smaller magnetic catheters market.
This company is extremely interesting. How many shares does FMRCo own? Eddie Yoon is always my final litmus test for a stock.
Giancarlo Nicoli profile picture
@ moneyball222,
I don't see them:
Giancarlo Nicoli profile picture
@ Solsten Investments
correct, it's $0.28/share.

BTW, WRT the stock split, on a second thought, maybe they'll enact a 2:1 or 3:1 reverse split, as to restore (by and large) the share count that existed before the non-dilutive financing.

And WRT the non-dilutive financing, of course it is dilutive: they are going to more than double existing share count. I guess they say it's non-dilutive as they hope it's not going to affect (much) the share price, because they have an 18-months lock up period. The reasoning might be that, absent new shares for sale, offer and demand should keep the stock price stable as per last friday's close.
They have 18 months to deliver tangible results, i.e. grow the company so to have a meaningful rise in the stock price, otherwise I think their ability to attract investors (in this and in other ventures) will be diminished.
Solsten Investments profile picture
It was $0.28/share: http://bit.ly/2tEw9Fy
Giancarlo Nicoli profile picture
@direwolf, your math is correct. I'm scratching my head also about the non-dilutive nature of the financing. Excercise price is that low (0.27) vs. yesterday's close stock price (0.67). We'll see.
If you read the conference call 36 million warrants were exercised so they now have 60 million shares outstanding. I guess you can call it a non-dilutive financing, but the share count has increased. I do not know the exercise price, but 36 million divided by 10 million comes out to about .27 a share. I like the company, but I sold my shares for a tax loss and will keep following them.
Solsten Investments profile picture
The mention that they might do a reverse split is killing the stock. Reverse splits never work out well for the current shareholders
Giancarlo Nicoli profile picture
@Solsten Investments
Management said during conference call that they aren't likely to do a reverse split. Who knows?
Not a lot of interest in this, but after watching what Mazor's done over the past couple of years, it seems like STXS could see huge gains in the long run.
Giancarlo Nicoli profile picture
Technology is there...
It is the first time over a very long period that STXS's future looks good.
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