EYES: Take a Look at Second Sight

02/10/2015 8:00 am EST

Focus: STOCKS

Nick Hodge

Founder and President, Outsider Club

Our latest buy recommendation is a company that has developed and sells an implantable prosthetic device—called the Argus II—that restores vision, explains Nick Hodge, editor of Early Advantage.

In short, in certain cases, Second Sight (EYES) allows the blind to see. It just IPO’d last November. The IPO was priced around $9.00...but the stock opened that day above $22.00 before running above $24.00.

Now it's back down below $9, despite recently getting approval for its product from Health Canada. It's already FDA approved.

Right now, the device is primarily for sufferers of retinitis pigmentosa, which has 8 million sufferers globally. Coming software updates this and next year will allow the process to work for macular degeneration, for which the market is five times as big.

By 2017, the company is planning feasibility studies for a new device—called the Orion I—that will stimulate the visual cortex.

This will open up their market to anyone without a functioning optical nerve. It raised about $40 million in the IPO to execute the plan.

Right now, it's valued as a $362 million company with only 90 units installed. That's $4 million each. It plans to grow to 350 units by 2017. The same math would make it an undiscounted $1.4 billion.

A 30% discount would still make it a $980 million company, some 2.7X what it trades today. And that's just on forecasted unit sales, without valuing the software updates or new product.

EYES is cheap, now trading below $9 a share. This is the lowest the stock has been since its IPO late last year. If you like the Second Sight story, you should take a look now.

Subscribe to Early Advantage here…

More from MoneyShow.com:

Benitec Biopharma

Sangamo Biosciences

MiMedx Group

Related Articles on STOCKS