* S&P has peaked and sever sell off may send BEAT under $5
* CEO and other officers have not bought shares even at these low levels even after the Q2 report when they can buy (see Yahoo financial)
* The clinical report that is so advertised by BEAT, was prepared by a doctor that was working for Cardionet. (see link 1)
* Cardionet has 6 competitors and 2 of them has has exact product like MCOT
* The Cardiologists are not really happy with MCOT and also with Lifewatch's product (see link 2)
* BEAT is burning 18M cash every 6 months. It may consider selling shares to raise cash. ( Listen to the CC of Q2)
* Not every bad news is discounted in the stock and more bad news( more rate cuts, more class actions, more competitions, more downgrades, selling shares) will push the stock down.
* Revenues were growing fast since 2006, but reimbursement rate cuts now made BEAT a negative growth company (see Yahoo financial)
* BEAT has large institutional holding, but part of them selling because they dont trust the CEO & Cardionet products anymore.( listen to the attacks of analysts in the last CC)
IS THE RECOVERY BUILT ON QUICKSAND?
17 August 2009
For the first time in months, the foundation of the 50% rally is being called into question. There is no doubt that the March bottom in the stock market was largely driven by government intervention. What the government was relying on with this plan, however, was that they could buy enough time to get the consumer back on their feet. Recent data, however, is beginning to show signs that the consumer is just as weak as they’ve ever been and showing little to no signs of recovery.
As we’ve been quick to point out, the real underlying components of this recovery have been questionable at best. Rail data continues to come in incredibly weak, retail sales have shown almost no signs of recovery and corporate earnings have shown no signs of organic growth (i.e., the no revenue recovery). Governments around the world are running short on time as global stimulus plans begin to lose their gusto heading into Q3 & Q4 of 2009.
The most alarming government intervention has not been in the U.S., however. China, one of the primary drivers of the global recovery, could be building a recovery on quicksand. Deloitte is out with a recent report detailing this intervention and the potential unsustainability of the government induced recovery:
Though the economy is forecast to grow above 8 percent in 2009 — it is likely to happen — there are significant vulnerabilities in the system. Much of the growth is being driven by the state and very little by consumers. For any sustained recovery, and because external markets still remain weak, domestic consumers must eventually become center stage in the recovery process, something yet to happen. Though car sales are up significantly, the high number is because of the base effect as well as government subsidies — it means car sales will falter sooner or later. Large swathes of migrant workers lost their jobs (they don’t show up in official unemployment statistics) and haven’t found new ones; the retail sector is at risk once subsidies on appliances are withdrawn.
As I type, Asian stock markets are all down 3%+. U.S. stock futures are down 1%. The so called “recovery” has been powerful thus far, but will almost certainly sink beneath the sand if the consumer does not find their footing. Thus far, there are little to no signs of this occurring.
S&P selloff is possible, however the rest of your reasons aren't incredibly compelling and your links don't work.
BEAT is a spec play at this point. Rates renegotiated = $$$. Rates remain locked = -$$$. It's a 50/50 shot, however several companies' independent survival obviously depend on it, so I would imagine they are lobbying pretty hard to renegotiate the reimbursement.
If Sept 1 rolls around without any news, I would imagine the stock wouldn't be doing much different than it is now. The new rate is reflected in the current price. Also, should rates remain stuck, management is going to be looking to sell the company per the CC - which means a fair bump in share price when the deal is announced.
Bottom line is that at 7, the stock is at fire sale prices, and I don't see any reason why someone should unload their longs at this point. Thanks for a rational post BTW.
Yahoo does let to provide the link for the third reason. Goole " Cardionet vs. Life watch" and you will see how cardiologists are complaining about cardionet
From that link:
<<CardioNet is no better and has nothing more to offer. Most cardiologists bitch about their CardioNet experience from poor sales reps, lack of customer service and reimbursement issues. Patients get stuck with hefty bills. Let's face it the patient experience dictates everything.>>