Mimedx: Bet on Bioimplants

08/21/2017 2:54 am EST

Focus: HEALTHCARE

Leo Fasciocco

Investment Columnist and Publisher, Ticker Tape Digest

Mimedx Group (MDXG), based in Marietta, Ga., is a medical firm making regenerative biomaterial products and bioimplants human placental tissue, skin and bone, notes technical breakout specialist Leo Fasciocco, editor of Ticker Tape Digest.


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With annual revenues of $245 million, the firm's regenerative biomaterials unit includes the design, manufacture, and marketing of products and tissue processing services for the Wound Care, Surgical, Sports Medicine, Ophthalmic and Dental markets.

Its biomaterial platform technologies include AmnioFix, EpiFix, OrthoFlo, Physio, AlloBurn, and CollaFix. AmnioFix and EpiFix. Its tissue technologies processed from human amniotic membrane are derived from donated placentas.

Physio is a bone grafting material consisting of bone tissue with no added carrier. CollaFix, its new brand, is its collagen fiber technology designed to mimic properties of musculoskeletal tissues in order to augment their repair.

The daily chart shows the stock climbing from $9.50 in April to a peak at $16 in June. The stock then put down a flat base.

The breakout looks solid coming with a widening of the daily spread and expansion in volume. The momentum indicator is strongly bullish.

MDXG's stock has been driving higher and just broke out from a nine-week flat base. The move carries MDXG to a new all-time high. It came public back in 2007.

The stock broke out from its long-term pattern in 2012 and has since been working higher. The push to a new high  could draw in more buying.  

MDXG's 12-month performance chart shows the stock appreciating 110% versus a 16% gain for the stock market.

chart

Net for the next two quarters will be strong. Profits for the third quarter are expected to surge 166% to 8 cents a share from 3 cents a year ago.

Then for the fourth quarter, the Street predicts a 100% gain in net to 10 cents a share from 5 cents the year before.

Overall net for this year is expected to surge 131% to 28 cents a share from 12 cents a year ago.  Looking out to 2018, the Street is predicting a 55% leap in net to 43 cents a share from the anticipated 28 cents this year.

The stock is only suitable for aggressive investors. It sells with a price-earnings ratio of  59. That is high but okay given the earnings growth rate. We are targeting the stock for a move to $21 off this breakout. A protective stop can be placed near $14.50.

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