Healthy Outlook for Inogen

10/13/2014 8:00 am EST


James Oberweis

President, Oberweis Asset Management, Inc.

Our latest featured stock is a medical technology company that develops, manufactures, and markets portable oxygen concentrators (POCs), notes Jim Oberweis, small-cap expert, money manager, and editor of The Oberweis Report.

POCs supply supplemental long-term oxygen therapy to patients suffering from chronic respiratory conditions. Traditionally, these patients have relied on bulky oxygen tanks for mobile use, which only offer the patient a finite amount of oxygen.

Inogen (INGN) makes proprietary systems that concentrate the air around the patient, offering a single source of supplemental oxygen with a portable device weighing only five to seven pounds.

The POC market is the fastest growing segment of the Medicare oxygen market and is still relatively early in its market penetration, representing only 4-5% of the total addressable oxygen market in the US.

Within the worldwide POC market, Inogen is the market leader and is also the largest provider of POCs to Medicare patients.

In the fourth quarter of this calendar year, Inogen plans to launch its first stationary at-home product, which will further expand its total addressable market.

In the company’s latest reported second quarter, sales increased approximately 51% to $30.4 million from $20.2 million in the second quarter of last year. Inogen reported earnings per share of $.11 in the latest reported second quarter versus $.12 in the same quarter of last year.

In the most recent quarter, the company was taxed at a rate of 40% versus 4% in the year-ago over year period and adjusted EBITDA grew 68% to $7.4 million from $4.4 million.

Clients of Oberweis Asset Management own approximately 20,000 shares. These shares may be appropriate for risk oriented investors.

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