The accidental transmission of infections is a big day-to-day problem for hospital personnel. There is an outfit in San Clemente, California that makes devices designed to avoid one of the major sources of the problem.
ICU Medical (NASDAQ: ICUI) provides disposable medical connection systems for use in intravenous (IV) therapy applications. Its products prevent accidental IV disconnects, protect patients from catheter related bloodstream infections and guard healthcare workers from exposure to infectious diseases through accidental needle sticks. The firm also manufactures various critical care products, including pressure monitoring devices, blood sampling systems, cardiac monitoring systems and angiography kits, under an agreement with Hospira (NYSE: HSP). Baxter International (NYSE: BAX) is a major competitor.
The company pleased investors last week, when it reported Q1 EPS of 63 cents. Analysts had been expecting 44 cents.
Revenues rose 0.2 percent (yr/yr) to $48.8 million. Management also guided FY07 EPS to $1.97 ($1.79 consensus) and FY07 revenues to $206.0 million ($205.9M consensus). Gross margins rose to 39%, from 33% in Q4. ICUI shares popped above 200-day moving average support on the news and are now forming a bullish "flag" consolidation pattern. Prices frequently exit flags moving in the same direction they were traveling when they entered them. In this case, that would be to the upside.
Brokers recommend the stock with one "strong buy" and one "hold." Analysts see a 25% average annual growth rate, through the next five years. The ICUI PEG ratio (1.07), Price to Sales ratio (3.19), Price to Book ratio (2.86), EPS Growth rate (53.66%), Net Profit Margin (12.45%), Return on Assets (11.18%) and Return on Investment (12.02%) compare favorably with industry, sector and S&P 500 averages.
Institutional investors hold about 95% of the outstanding shares. The stock is one of those used to calculate the S&P 600 SmallCap Index. Over the past 52 weeks, it has traded between $36.23 and $48.51. A stop-loss of $38.35 looks good here.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.
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