Angeion Corporation (NASDAQ–ANGN)
Closing price August 27, 2008-$5.15
We are revisiting Angeion. At around $5 a share (we sold it last time at $9.51), we think the risk/reward is favorable.
Earnings released yesterday were not great—but they made money. Sales were $7.6 million down from $8.9 last year. They lost a clinical trial customer last year that was the entire sales difference. But they actually were more profitable than last year making $.06 per share versus $0 per share. They announced that they had a new clinical customer signed up for Q3—so this should help the sales comparisons going forward. Read their press release, they have a lot of growth incentives in the works. They just need one or more to hit and earnings will be propelled. Gross margins were just over 50% and they have $7.5 million in cash (no debt).
Trading at 40% of our valuation, with $1.80 per share in cash (35% of market cap), good gross margins, the ability to be profitable despite the sales decline—we think this is a good time to buy.
The 52 week low has been $4.70 and the high–$9.77.
ANGN trades about 9,000 shares a day, so be careful buying. Limit buys up to $5.25.
There are only about 4.2 million fully diluted shares outstanding.
Founded in 1986, Angeion Corporation acquired Medical Graphics Corporation in December 1999. Medical Graphics develops, manufactures and markets non-invasive cardiorespiratory diagnostic systems that are sold under the MedGraphics and New Leaf and trade names. These cardiorespiratory diagnostic systems have a wide range of applications in healthcare as well as health and fitness. The Company’s products are sold internationally through distributors and in the United States through a direct sales force that targets heart and lung specialists located in hospitals, university-based medical centers, medical clinics and physicians’ offices, pharmaceutical companies, medical device manufacturers, clinical research organizations, health and fitness clubs, personal training studios, and other exercise facilities.