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Volcano Corporation Message Board

  • sleepyfloyd76 sleepyfloyd76 May 16, 2013 10:30 AM Flag

    Follow the smart money...

    I'm new to this board so forgive me if this has already been discussed, but I wanted to call attention to the insider purchase made by VOLC board member Ronald Matricaria back in March. He purchased 20,000 shares at $21.50, almost 30% higher than the current price. For those who do not know his background, Matricaria was formerly the CEO of medtech heavyweight St. Jude (STJ) and also spent 23 years at Eli Lilly in senior management roles. I think it would be fair to say that he knows this sector inside and out. The last time he saw something compelling enough to make an open market purchase was LIFE, where he also sits on the board. Matricaria purchased a similar $ amount on LIFE shares when the stock was $43. 18 months later, LIFE was acquired by TMO for $74, not a bad return. The point is you have a chance to get into VOLC at a 30% discount to an extremely savvy medtech investor who in his role as a board member is privy to information not available to the general investing public. As to the comments about VOLC's valuation, they ignore the fact that small/mid cap medtech stocks don't trade on strict P/E multiples. The reason for this is that large medtech companies are serial acquirers of the smaller names, and because 75% of opex is generally consumed by SG&A of which most is related to the sales force, there are massive synergies in buying out smaller companies since you can consolidate the two sales forces. As sales reps making a call on customers just add the new products to their offering. No need for redundancy. Will VOLC be acquired in the next 2 years. My bet is yes and Matricaria seems to agree.

    Sentiment: Strong Buy

17.980.00(0.00%)Feb 13 3:59 PMEST