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Volcano Corporation Message Board

  • z_for_three z_for_three Nov 11, 2009 11:53 AM Flag

    "Pent-up Demand" according to CEO...time for stock buyback!

    According to the CEO from yesterday's conference call, VOLC has "pent-up" demand. Clearly, the U.S. device sales were poor given the budgeting environment at hospitals, although disposals in the U.S. were good. Any improvement in the U.S., should help drive significant device sales. Earnings were solid and now profitability MUST be the focus. Now that Japan is direct, let's leverage the existing infrastructure. Let's roll out those new products, make some tuck-in acquisitions, use Abbott and Medtronic to get hospitals to see the value of IVUS and get reimbursements for cardiologist they have incentive to increase utilization of the device.

    In the meantime, the stock needs a boost. Unless fund managers start buying healthcare big this in these last two months...given their huge underperformance...VOLC might languish. So, what can be done???

    Well, a small stock buyback can easily be done. According to the latest 10Q, VOLC has $129 million of cash and no debt. That's more than $2.50 per share! Let's use some of that cash and buyback 5 million shares at $15.50 or $79 million, leaving $50 million in cash. That is still plenty of cash for operations and partial funding (with stock) other small tuck-in acquisitions.

    Come on management...giddy up! Announce a stock buyback program...we'll see $20+ tomorrow. If you are so confident in 2010 profitability, this will be a great return on investment for the firm.

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