In the past week we saw an increase in insider buying coming from the health care industry. Last week GuruFocus reported 31 different insider buys coming from 19 different health care-based companies. These buys spanned across the sector from research and development labs to pharmaceutical companies. The following four companies are all a part of the medical supply sector of the health care industry. They represent significant insider buys coming from one or more directors or corporate executives.
1. Abiomed (ABMD)
The largest insider buy of the week was reported by Abiomed, a medical devices company.
One of the company’s directors, Henri Termeer, bought 100,000 shares of company stock at $19.86 per share. This cost the director a total of $1,986,000. Termeer now holds on to at least 282,398 shares of Abiomed stock.
Despite Termeer’s large buy, he was the only insider making buys last week. Three different insiders sold a total of 37,673 shares. As you can see in the graph below, the company’s price has recently jumped from its 52-week low to near a 10-year high price of $24.62.
Since Termeer’s buy, the price of the stock has increased by 12.79%.
Abiomed is a medical supply company that specializes in products dealing with heart conditions and failure. The company develops, manufactures and markets products that are designed to enable the heart to rest, heal and recover by improving the blood flow and/or performing the pumping function of the heart. Abiomed also created and owns the Impella which is the world’s smallest heart pump.
The increase in insider activity is coming from the record fourth quarter fiscal 2013 that the company had. Some of the quarter’s highlights include:
· The revenue was $43.7 million, compared to the same period 2012 which was $37.3 million
· GAAP net income was $3.7 million, or $0.09 per diluted share, up from $2.6 million, or $0.06 per diluted share, in the same quarter 2012.
· For the full fiscal year 2013, the total revenue was $158.1 million, up 25% from the previous year.
With these increases, the company upped its expectations for fiscal 2014. Abiomed reported that it expects 2014 revenue to be in the range of $180 to $185 million, specialized product Impella’s revenue is forecasted to increase by approximately 20% and the GAAP operating margin rate for the full year is expected to be in the range of 7% to 8% of total revenue.
The financials on Abiomed show that the company currently has no debt. The company’s revenue has also been on the rise since 2008. Also, Abiomed’s revenue growth is ranked higher that 93% of the 165 companies in the global medical devices industry.
ABMD data by GuruFocus.com
There are currently 5 gurus that hold stake in Abiomed.
With its shares up 4.42%, Abiomed trades at $23.39.
2. Luminex Corporation (LMNX)
Luminex has reported three different insider buys coming from Director Walter Loewenbaum since the beginning of May.
Combined, Loewenbaum bought a total of 117,400 shares at an average price of $17.13 per share. This cost the director a total of $2,023,477. Loewenbaum currently holds over 2 million shares of Luminex.
Loewenbaum’s buys are the first insider buys reported for the company since 2009. Since his most recent buy on May 9, the price of Luminex has increased by 6.8%.
Luminex is also a medical supplies company. Luminex develops, manufactures and markets biological testing technologies with applications throughout the clinical and life sciences industries.
The company has seen a successful first quarter. Some of the company’s financial and operating highlights:
· A consolidated first quarter revenue of $53.2 million, a 9% increase from 2012
· Signed a collaboration and license agreement with Merck (MRK) to develop a companion diagnostic that will help screen patients into Merck’s lead investigational candidate drug study for Alzheimer’s disease.
· Non-GAAP net income of $7.9 million, or $0.19 per share.
· GAAP net loss of $2.5 million or ($0.06) per diluted share after a $7 million charge associated with finalizing the termination of their molecular distribution agreements.
The financials on Luminex show that the company’s per share revenue has been on the rise since 2004.
LMNX data by GuruFocus.com
GuruFocus warns that the company’s P/E is close to a two-year high of 120.13. It also notes that its assets are growing faster than its revenue which might mean that the company is getting less efficient.
PRIMECAP Management currently holds 2,543,292 shares of Luminex, and Paul Tudor Jones holds 18,000 shares.
With its shares down 0.05% today, Luminex trades at $18.37.
3. Pro-Dex (PDEX)
This past week medical supply company Pro-Dex reported two insider buys coming from two of the company’s directors.
Directors Nicholas John Swenson and Raymond Cabillot each bought a total of 28,206 shares at $2.00 per share. This cost each of the men a total of $56,412.
Since their most recent buy, the price of Pro-Dex has increased by 2%.
The company recently appointed a new COO (Richard Van Kirk) as well as a new CEO (Harold Hurwitz).
The company is a rather small surgical supply company with operations in California and Oregon. The company specializes in rotary drive surgical and dental instruments used primarily in orthopedic, spine, maxocranial facial and dental markets.
The company is set to release its third fiscal quarter 2013 results this afternoon.
The analysis on Pro-Dex reports that the price of the company is nearing a 52-week high of $2.24. It also reports that the company’s P/S ratio is close to a 3-year high of 0.5. The company’s revenue has been in decline for the past five years.
PDEX data by GuruFocus.com
There are currently no gurus that hold a stake in Pro-Dex.
Pro-Dex currently trades at $2.04.
4. Boston Scientific (BSX)
On May 6, Boston Scientific director, Mario Ernest, bought 30,000 shares of BSX stock at an average price of $7.76 per share. This transaction cost the director a total of $232,800.
This buy marks the first insider transaction for Boston Scientific since Nov. 2012.
Boston Scientific develops, manufactures and markets medical supplies that are used in a range of interventional medical specialties. The company’s products are offered in seven primary businesses: Interventional Cardiology, CRM, Endoscopy, Peripheral Interventions, Urology/Women’s Health, Neuromodulation and Electrophysiology.
Some highlights of the first quarter financial results for Boston Scientific:
· Sales were at $1.761 billion, down 6% from the first quarter 2012
· EPS of $0.16 per diluted share
· Grew combined revenue in the countries of Brazil, Russia, India and China 35% year-over-year on a constant currency basis
· It generated $163 million and used approximately $100 million to buy back 13 million shares under the company’s existing share repurchase authorizations.
The GuruFocus analysis shows that the company’s per share revenue has been in decline for the past five years and that the gross margin has been in a long-term decline. The average rate of decline per year is 1.5%.
BSX data by GuruFocus.com
The analysis also shows that the company’s price and P/S ratio are currently at three-year highs.
There are currently 14 gurus that hold shares of Boston Scientific. To read an analysis on Leon Cooperman and Michael Price’s holdings in Boston Scientific, click here.
With its shares up 2.37%, Boston Scientific trades at $8.65.
To view the full list of insider buys in the health care industry, click here.
- CEO Buys, CFO Buys: Stocks that are bought by their CEO/CFOs.
- Insider Cluster Buys: Stocks that multiple company officers and directors have bought.
- Double Buys:: Companies that both Gurus and Insiders are buying
- Triple Buys: Companies that both Gurus and Insiders are buying, and Company is buying back.