Small-Cap Health Trio

07/01/2005 12:00 am EST

Focus:

James Oberweis

President, Oberweis Asset Management, Inc.

"Research adds value, so do your homework," notes James Oberweis , an expert is micro- and small-cap stocks, an area where he believes it is best possible to find market inefficiencies. Here, he looks at a trio of small-cap healthcare issues, suggested for risk-oriented investors.

"Allion Healthcare (ALLI NASDAQ) provides pharmacy and disease management services to assist patients, healthcare providers, and payers in managing HIV. Over 90% of revenue in 2004 was derived in the states of New York and California. In its latest reported first quarter, sales increased 70% to $22.7 million from the first quarter of 2004. Earnings per share were $.01 in the quarter versus a loss in the same quarter of last year. Allion completed their initial public offering of four million shares on June 22, 2005, at $13. The company has granted the underwriters an option, exercisable until July 21, 2005, to purchase an additional 600,000 shares at the IPO price. Clients of Oberweis Asset Management own 247,000 shares.

"Healthtronics (HTRN NASDAQ) develops and markets medical devices utilizing shock wave technology. The company provides state-of-the-art, non-invasive treatment solutions for certain urologic and orthopedic conditions. The medical devices include the OssaTron orthopedic shockwave system, and LithoTron kidney lithotripter, and the LithoTron endourology workstation. The company has made two acquisitions since the beginning of 2004, acquiring HMT Holding and Prime Medical. In the company’s latest reported first quarter, sales increased 57% to $63.2 million. Healthtronics reported earnings per share of $.11 in the latest reported first quarter versus $.05 in the same quarter of last year. Clients of Oberweis Asset Management own approximately 227,000 shares.

"Intralase Corp. (ILSE NASDAQ) manufactures the Intralase FS laser used as a microkeratome alternative in the first step of LASIK vision surgical correction. According to the company, its technology offers significantly lower complication rates and better visual outcomes than microkeratomes, the current standard of care. Intralase is currently used in 14% of U.S. LASIK surgeries and is gaining market share. In the company’s latest reported first quarter, sales increased approximately 123% to $21.2 million from $9.5 million in the first quarter of 2004. Intralase reported earnings per share of $.06 in the latest reported first quarter versus a loss in the same quarter of last year. Clients of Oberweis Asset Management own approximately 604,000 shares."

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