Haemonetics (HAE) is a mid-cap medical technology stock that’s on the cusp of breaking out to multi-year highs, notes Mike Cintolo, growth stock specialist and editor of Cabot Top Ten Trader.
The company specializes in blood management solutions, delivering devices, consulting services and information to hospital, plasma and blood collectors.
The current focus is on NexSys, a platform that makes plasma collection more productive and efficient, and the recently-approved expanded use of the TEG6s Hemostasis Analyzer System for use in adult trauma settings (it’s the first cartridge-based system in the U.S.) is another impressive innovation.
Analysts also like that EPS growth, which stagnated from 2015 through 2017, is set to accelerate nicely, with analysts see the bottom line rising in the low- to mid-20% range both this year and next.
We’ll be the first to admit that operational improvement stories are less than sexy, but when paired with the right company, in the right market, they can drive big gains. That’s what we see happening with Haemonetics.
The big picture story at Insulet (PODD) is that diabetes affects over 365 million people globally, and treatments can be improved by reducing the inconvenience and cost of multiple daily insulin injections.
Insulet’s innovative Omnipod Insulation Management System does both. Omnipod is a pump patch that can be worn on the body and injects insulin based on pre-set parameters.
The product drove sales growth of 22% in 2018 and revenue growth should be about the same both this year and next, driving earnings significantly higher. Insulet is also newly profitable, which considerably lowers the stock’s risk profile and reduces the need for dilutive stock offerings just to pay the bills.
First quarter results were reported in early-May and were great (revenue up 29% to $160 million and EPS of $0.07 beat by $0.06). But that’s not the only reason we like the stock now.
Rather, the strength after the earnings release points to growing confidence in management’s execution and the long-term potential for Ominipod sales to remain resilient, despite competition. The firm’s ongoing expansion efforts with Medicare, Medicaid and United Health Group (UNH) should help keep growth on track.
