Angeion Corporation (NASDAQ–ANGN)-BUY Recommendation

Angeion Corporation (NASDAQ–ANGN)
Valuation-$13.03
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.
About Angeion
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.

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