Summary:
CardioNet Inc. (BEAT), now renamed BioTelemetry Inc. is the world's leading supplier of Mobile Cardiac Outpatient Telemetry (MCOT). BioTelemetry Inc. provides the next-generation ambulatory cardiac monitoring service with beat-to-beat, real-time analysis, automatic arrhythmia detection and wireless ECG transmission. BioTelemetry prides itself with helping clinicians prevent morbidity, mortality and disability with rapid diagnosis and treatment of patients with cardiovascular disease. This company operates in three segments: Patient Services, Product, and Research Services.
Fundamental Overview:
BioTelemetry has provided extremely strong current fundamentals that were posted during Q2 of 2013. BioTelemetry began the year at $2.33 per share, now valued at $9.83. This company is currently showing 331.14% YTD and 316.53% for yearly performance, and a quarterly performance of 70.96%. A recent report by Dougherty and Company rated BioTelemetry's target price to $14.00. Dougherty and Company stated that BioTelemetry struggled with reimbursement issues and management turnover in the past, although they believe these issues are no longer a problem. Dougherty and Company also believe that BioTelemetry has developed perspective for identifying additional markets for expansion beyond cardiology. This provides substantial opportunity for growth. Lake Street Capital Market analyst Bruce D. Jackson initiated coverage on BioTelemetry with a buy rating and price target of $14.00 on September 6, 2013. Lake Street Markets noted, "BioTelemetry is one of the few publicly-traded, pure-play mobile health companies available to investors. Mobile health (which includes telehealth and remote monitoring) is coming into its own as the U.S. healthcare system shifts to an accountable care model where providers are increasingly incentivized to keep patients out of the hospital. One tool being employed in the management of chronic disease is remote monitoring and management, which enables medical practitioners to detect problems and intervene before the patient has to go to the emergency room. The recent acquisition of Cardiocom by Medtronic can be taken as confirmation that mHealth is ready for prime time, and we believe that BioTelemetry is well positioned to take advantage of this trend." This shows that BioTelemetry is growing in investor confidence.
Comparisons:
BioTelemetry is currently out-performing the majority of healthcare companies. Popular healthcare investment choice Biogen Idec. Inc. (BIIB) is currently producing 69.42% YTD with a quarterly performance of 24.25%. BioTelemetry at this time, is dominating Biogen Idec.'s YTD by nearly 500%. BioTelemetry is also significantly outperforming the SPDR S&P Health Care Services (XHS) ETF by 900%. This shows the incredible strength of growth that BioTelemetry is displaying for 2013.
When comparing SPDR S&P Health Care Services' ETF top holdings to those of BioTelemetry the results remain consistent. Popular choice companies such as McKesson Corporation (MCK), Cigna Corporation (CI), and Humana Inc. (HUM) lack growth in comparison to BioTelemetry's yearly and quarterly performance.
Conclusions:
BioTelemetry is currently reflecting strong fundamentals and growth in comparison to the overall healthcare sector. They are currently producing an average monthly increase of 17.65% and YTD of 331.14%. I suggest a bullish sell-to-open put with a strike of $11.00 to maximize ROI and minimize risk. With this position you will receive a ROI of 10%-40% if covered at $10.28-$12.87 in short-term months. Currently the probability of this occurring is 35.80%. If the options expire worthless, then there will be a premium of $265.00 still remaining. I believe the price target of Dougherty and Company and Lake Street Markets is accurate and will occur during 2014. BioTelemetry is a niche company in the healthcare sector and will produce explosive returns with their expansion into new markets.
Disclosure: I am long BEAT, MCK. 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. (More...)
No comments:
Post a Comment