With Quidel, the focus is on the diagnosis

Posted Mar 24th 2008 5:26PM by Joseph Lazzaro
Filed under: Stocks to Buy

The choppy/consolidating (or perhaps worse) market conditions sometimes give the impression that growth plays do not exist, but that is not the case, and one growth company worth a review is Quidel Corp. (Note: Quidel is only for investors who can tolerate high-risk.)

Quidel Corporation (Nasdaq: QDEL) develops, manufactures, and markets point-of-care, rapid diagnostic tests for the detection and management of a variety of medical conditions and illnesses. Its products are used to identify a pregnancy, and detect infectious diseases, autoimmune diseases, and osteoporosis, among other conditions.

Analysts like Quidel's flu testing market share, and solid positions in strep and pregnancy detection. Analysts expect 15-20% revenue growth in 2008, after a double-digit increase in 2007.

Operating costs are reasonable; margins are solid and/or improving. The Reuters FY 2008/FY 2009 EPS consensus estimates for QDEL are $0.61 to $0.75.

The risks? Analysts are keeping an eye on Quidel's core component costs and marketing expenses.

The First Call mean rating for QDEL is: Buy [5 firms]. Mean 2008 target: $23 [high: $27, low: $19].

Stock Analysis: Quidel Corp. is a high-risk stock not suitable for moderate-risk or low-risk investors. Investors with an investment horizon longer than 3 years should be rewarded from QDEL's shares. Sell/Stop Loss if you were to purchase shares in this company: $7.

Disclosure: Lazzaro has no positions in stocks. In addition to private real estate holdings, he owns corporate and municipal bonds, and cash certificates of deposit.

Tags: health care, medical services, medical tests, QDEL, Quidel Corp.