It is significant that the stock has earned a net profit for the most recent quarter (ended November 2007) because the healthcare sector is so full of small capital securities with good ideas but negative operating margins. The Medical Equipment and Supplies industry depends on physician and surgeon endorsements, and there are signs that the medical community does indeed find this company’s minimally invasive and image-guided products useful.
Peripheral Vascular Disease (PVD) is a nearly inseparable part of rising longevity in the population at large, but modern lifestyles increase chances of small blood vessels hardening and narrowing. The company is therefore strongly positioned in a growing business segment, with considerable technology barriers to entries by competitors. Angiography carries patient risks which make surgeons reluctant to accept new suppliers.
The company has a significant business presence in dialysis. Though vascular surgeons and nephrologists are distinct customers, they mostly work in the same hospitals and other medical institutions. This gives the company the opportunity to spread sales and distribution over related product lines. The same concept applies to the company product ranges for vascular access, laser procedures for small blood vessels, balloons and catheters, as well as for breaking clots and draining wounds.
Equity and assets are nearly nine times higher than total 2007 liabilities. The stock is therefore in an excellent position to yield superior value in the near term. Though the company suffered an intellectual property setback in July 2007, a January 2008 court judgment shows that the management has been able to act swiftly and effectively to protect its revenues from laser intervention in veins.
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