Several leading advisors are seeing opportunity in the market for improved vision. John Buckingham and Dan Kurz look to laser vision correction. Louis Navellier likes a larger play in contact lenses. And John McCamant reviews the biotech players seeking to treat vision loss.

(For more on the advisors cited below, please click on their photos.)

Buckingham, John

"Investors pulled a head fake on laser vision correction provider LCA-Vision (LCAV NASDAQ)," says John Buckingham, editor of The Prudent Speculator. "The company recently reported a solid first quarter, as earnings reached $0.50 per share on revenue of $31.7 million, topping Street analyst expectations. Earnings were guided much higher, to a range of $1.55 to $1.65 from the prior EPS guidance of $0.90 to $0.95 and consensus estimates of $1.07. LCAV shares shot up more than 14% on the news, but for some reason (likely interest rate and general economic concerns given the income-sensitive nature of the business) have fallen nearly 20% since then. We had revised our fundamental and liquidity goal prices upward to $34 and $32, respectively, to account for the improved outlook and the likelihood of the arrival of new momentum players."

Kurz, Dan"VISX (EYE NYSE) impressed investors with first quarter earnings per share results, which were 15% above the consensus estimate," says Dan Kurz, editor of DK Equities Newsletter. "Both revenue and earnings growth were more lively than anticipated by most analysts. In particular, revenues grew 27.3% as earnings surged 109.1%. The robust top line increase was powered by increased use of its new CustomVue laser vision correction (LVC) procedures and the associated license-fee boost. CustomeVue (which cost $245 per eye versus $100 charged for the older procedure) accounted for 34% of total procedures, up from 29% in the fourth quarter of 2003. CustomVue also allowed for leveraged earnings growth, as the associated margin is roughly 90%. In the interim, VISX is gaining share, and expanding its LVC dominance. We continue to believe that VISX will positively surprise investors. Our buy rating is confirmed."

Navellier, Louis"Alcon (ACL NYSE) is a Swiss company that sells its eye-care products in more than 180 countries," notes Louis Navellier, editor of MPT Review. "The company sells a variety of surgical, pharmaceutical, and contact lens-care products. Alcon is best known for its Opti-Free line of contact lens solutions and related accessories. The stock has historically had very steady, predictable earnings growth due to the fact that an aging population naturally needs Alcon's products. The company's pharmaceutical division, which treats glaucoma and other degenerative eye diseases, is now its fastest-growing division. We are adding the stock to our model portfolio as a new buy recommendation."

McCamant, JohnMeanwhile, biotech expert John McCamant, editor of The Medical Technology Stock Letter, looks at age-related macular degeneration (AMD), a leading cause of vision impairment in adults. He explains, "Perhaps 50 million people worldwide suffer from AMD, and there is present therapy for most patients. Among the players in this field, we would focus on Genentech (DNA NYSE) and GenVac (GNVC NASDAQ). DNA is developing Lucentis, which is being tested in two Phase III trails. Lucentis may halt blood vessel formation in the eye, and in a previous trial, it enabled many patients to regain some visual acuity. Meanwhile, GenVac has released interim Phase I data for its AdPEDF to treat wet AMD. At this point in development, this compound has a better safety profile than any of the other more advanced drug candidates did at this stage. There is speculation that this compound may be able to actually improve vision, not just halt vision loss, although this has not been shown in a controlled trial. GenVac's approach, while early, would seem to have a potential advantage in cost, specificity, and duration of action."