SonoSite (NASDAQ: SONO) develops,
manufactures and distributes hand-carried ultrasound systems for use in various medical specialties and in a range of clinical settings. The firm's devices range in size from small handheld units to laptop-sized systems and allow for point of care analyses where larger, cart-based machines may be too cumbersome. SonoSite systems support work in anesthesia, cardiology, critical and acute care, emergency medicine, OB/Gyn, radiology and surgery. Products are sold through direct sales representatives, third-party distributors and strategic alliances.
The company pleased investors earlier in the week, when it guided Q1 revenues to $52 million and said the company would make a profit. Wall Street had been looking for sales of $49.95 million and a deficit of a penny per share. In discussing the favorable view, the CEO particularly noted growth on the international side.
The stock
popped on the news and is now consolidating the gain in a bullish "flag" pattern. Equities frequently exit flags moving in the same direction they were traveling on entry. In this case, that would be to the upside.
Brokers recommend the issue with one "strong buy", four "buys" and one "hold". Analysts see a 55% average annual growth rate, through the next five years. The SONO Price to Sales ratio (2.63), Price to Book ratio (2.79) and Sales Growth rate (19.12%) compare favorably with industry, sector and S&P 500 averages. Institutions hold about 95% of the outstanding shares. Over the past 52 weeks, the stock has traded between $24.57 and $39.20. A stop-loss of $26.00 looks good here. Note that the firm is expected to announce Q1 results on April 28th, after the close.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold a position in the stock discussed above.
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