Penumbra: A Breakout in Medical Services

02/14/2020 5:00 am EST

Focus: HEALTHCARE

Leo Fasciocco

Investment Columnist and Publisher, Ticker Tape Digest

Penumbra (PEN), based in Alameda, Ca., provides health services focused on interventional therapies; technically, the stock has broken out from a 10-week, double bottom base, notes Leo Fasciocco, editor of Ticker Tape Digest.

The company's products address needs across two markets — neuro and peripheral vascular. Its products address ischemic stroke, hemorrhagic stroke and various peripheral vascular conditions that can be treated through thrombectomy and embolization procedures.

With annual revenues of $445 million, Penumbra's products are used by specialist physicians, including interventional neuroradiologists, neurosurgeons, interventional neurologists, interventional radiologists and vascular surgeons.

PEN's long-term chart shows the stock coming public at $40.15 in 2015. The stock worked steadily higher to $167 a share by 2018. It then went into a long-term consolidation.

The stock set up a classic double-bottom base. The breakout clears the base nicely and the stock's momentum indicator is bullish.

Net for the fourth quarter should jump 38% to 18 cents a share from the 13 cents the prior year. PEN's net should jump 89% for 2019 to 95 cents a share from 51 cents the prior year. They generally report in late February.

The company beat the Street estimate the past four quarters by 7 cents a share, 6 cents, 10 cents and 2 cents. Looking out to 2020, the Street predicts a 20% increase in net to $1.14 a share from  the anticipated 95 cents for 2019.

We are targeting the stock for a move to $210 within the next few months, or sooner. A protective stop can be placed near $172.

Subscribe to Ticker Tape Digest here…

Related Articles on HEALTHCARE