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

|Includes: ABIOMED, Inc. (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