On occasion I have referred to the old Wall Street addage that money flows from the impatient to the patient. That philosophy has worked well for me over the past two plus years on this investment. However, patience is no guarantee an investment will be successful. Been there, done that.
So it is important to regularly question whether the actions of Novadaq warrant our continued patience. I, for one, listen to all of the presentations and all of the quarterly CC's, and all of the Investor Day presentations. When you see the continued upgrading of their equipment you have to ask yourself a couple of straight forward questions. Can a reputable hospital that performs a great nany complicated surgeries not have at least one of these machines in their surgery suites? Will surgeons who either see or become aware of the benefits of this equipment not apply increasing pressure on hospital administrators to obtain it? Are the surgery applications for this equipment expanding? Is the equipment cost effective enough to meet the requirements of a hospital administrator? If you follow this company closely, the answer to all of the above questions is an increasingly stronger and stronger yes.
Then add to the above the simple but critical fact that there is absolutely no current competitive equipment on the marketplace today or any time soon. My conclusion and the conclusion of many of the regulars here is that continued patience is overwhelmning justified,
From my model:
Revenue for the 2nd quarter, $13.5 Million
Net income (excluding one time and stock expenses) $-2.5 Million
Earnings per Share (-$0.05@)
The should break even in the 4th Quarter!
Revenues of $19.0 Million
Net income (excluding one time and stock expenses) $-0.01 Million
Earnings per Share (-$0.00@)
The revenue drivers are well stated by Endo above. The expenses are the ongoing push for clinical and economic justification in existing and new application as well as the burgeoning sales and marketing hiring.
What data are you operating on? Do you have sales and expense figures? what is the total of red ink over the last 14 years? Can they make up that red ink in a couple of years? Cardica is a idea that some have confidence in (investors) what is the outlook 2-3 years from now.
Breaking off from LIfecell should be immediately accretive to earnings. Their world wide opportunity is also unfolding nicely. The rollout of the nuclear medicine application in 2015 can't hurt either.
Patience is a virtue.