It can be used with either. It will be sold as part of the "Patient Kit" and is to be used as a marker for use with either visual or fluorescent light. The doctor/surgeon will mark areas of interest during the diagnostic phase and then use this marking to guide his/her surgery.
I see $26 counter offer by the "consortium" today or tomorrow ("3 day response" clock). Then I would assume the new party would also get the same "3 day" clock...though this is not specified anywhere that I know of. However if they aren't given equal time there is a definite law suite case potential so I think the "independent" board members would bend over backward to seem "impartial" and "fair". The response to the new "consortium" offer has to be "a substantially better" offer to be considered though it might not be by the same margin as the first offer ($23.00-$19.50)= $3.50. You might be in the ball park with your $30 price.
If there are 2 million millionaires in China and they spend 1% ($1000 per year) for total medical expenditures this would be a $2 billion revenue stream per year. This would include clinics (general medical needs), specialty services (hospitals and rehabilitation). Chindex has developed and continues to strengthen itself as the sole provider of this, "brand". If gross margins are 18-20% as projected by Chindex and net margins (to the stockholder) are ~5% then Chindex is looking to capture ~$100 million after-tax earning per year. A P/E for the company can be estimated at 6 + growth in earnings or in Chindex case, 6+16=22 Even at half of this the P/E should be 11 times the $100 million or $1.1 Billion. There are ~18 million shares outstanding thus the Chindex valuation per share should be ~$60 per share! To capture only ~35% of this at $23@ is a nice deal if you can get it. Remember this is using conservative 2,000,000 users of the system and only $1000 in health care expenditures for someone making in excess of $1 million a year! The P/E should probably be double what was used. Roberta and company would love to have a company with a monopoly in the fastest growing most prosperous country of the world for probably less than 10 cent on the dollar.
All comments and assumptions are mine and not those of any employee of Chindex or Fosun.
Please feel free to critic or modify any of my assumptions and give your valuation estimates.
Three days from the second offer. I suspect that is business days and may include an additional day for "official" notification, but we should hear the consortiums re-submittal from $19.50 to something "superior" to the $23.00 offer by weeks end. I don't know if the second suiter has three days to respond but if they aren't given the same opportunity I would suspect the company would be opening itself to law suites.
Without earnings price is determined by estimates and emotions. With the medical industry in flux (ACA), this company is just entering this industries aura with a new product. Arun reiterated just last week 40% revenue growth. But with the market pricing the stock for ~50-60% growth, and the pall of Obamacare draped over the industry, the speculative price for NVDQ has been tamped down. It would be nice to see them exceed the 40% figure by a wide margin for Q1 and talk about the marketing efforts to penetrate hospitals(PINPOINT) and clinics(LUNA). I am not expecting this. I sense a consistent and measured progress will be the theme for the next few quarters. Novadaq is in the "Early Adopter" phase of the curve and that never "explodes" up. "Early Adopters" are won over one at a time or in small batches. These are the vanguard and risk takers. Until we get to ~10-20% of the market potential we should expect steady though significant growth. Currently Novadaq is still in the low single digit portion of the curve. My guess--0.5% or less.
Great Company. Let it grow.
Endo, where did you get the price differentiation on the kits from. I heard the $1200 for rental but $600 for captital purchased machines. If your sure of your numbers that's fine. I'll try to listen again to the Needham call...parts of it were unintelligible.
I didn't. Copied directly from E-mail and dropped it in.
Nit much new in the presentation except the PILLAR II study. Couldn't hear the questions at the end but it sounded like some of those were seeking "new" information and clarifications on purchases--"25% capital purchases for PINPOINT" and mostly rentals for LUNA. "For rental kits-$1200-$1300@ for capital purchases the kits are "about half of that".
Henry, if what you have written is even largely true, you have given insight into what may be happening. I know from the standard (discounted cash flow, EVA, and other modeling techniques use by long term "investors" that NVDQ is a bargain at these prices including $24@. The chartist, short term traders and others of that ilk would be looking at the "parablolic" share price growth and recognize it as the results of "speculative bubble formation" and respond accordingly (sell, short, option coverage sell calls, buy puts) and they are also rational and have made money. If the "Barclays" are artificially moving the market using sentiment, deep pocket money, and dark pools, I don't know how I can profit from that, though I may try to mitigate their manipulations. Long term investors should keep their eye on the ball. Do their homework (discounted future cash flow valuations) and add to holding when the price is below that target and look for other better investments when the price is exceeded.
Thanks for your board contribution.
Without reading the study details we may never know. I would suspect the individual---these are humans--may have not read or applied the PINPOINT technology optimally and missed a small leaker. Even the tiniest of leaks is serious. Still, to reduce the error rates by two orders of magnitude is significant even in operations. Like you I would like to know why 2 were missed and present it so future "misses" could be avoided.
The price of the NVDQ stock was based on future expectations. People started noticing the "new" and "wonderful" technology for the OR. The company hasn't made money yet and most likely won't until the second half, maybe even the 1st quarter of 2015. The stock has run up from $3 Canadian to $24 US in a few years! If you bought 4 million shares at $3 three years ago and could now sell 0.5 million and pay for the other 3.5 million you have left free and clear with no risk, wouldn't you? So someone did. Then all the Johnny-come-latelys said "wait, someone has "inside" information and maybe I should take some of my profits off the table too! With panic selling ensuing, who would buy the offered shares? The SAGES conference is happening but silence is worrisome for traders. The PILLAR II results came out and it was not flawless....more worry....2 out of 146 patients had leaks.... Put this into perspective the base case for this type of surgery is 30-35% vs 1.38%! Sounds pretty good to me, especially if the leaks lead to death in the majority of the surgeries. The price at $20 or $21 is not the bargain it was at $3 or $8 or even $12, but that's OK if you are in for 5-10 years and it goes to $250-$300. I don't like my stocks to go parabolic. It brings in traders and shorters and market manipulators. I'd rather see 100 days of up 5 cents than one day of up 5 dollars. At the end of the year I'll still own my shares and my friends won't be calling me daily to find out why it went up a dollar or like today why it went down two. For all my friends..., go to work, come home and play ball with your children, wash the dishes after dinner, kiss your wife good night. Novadaq will be there when you want to send them to college or when you chose to retire.
Don't pull the radish out of the ground to see if it is growing. Wait till the harvest.
Who would sell their Umbrella or buy one based on todays weather? Do you know anyone who sells their snow tires in April when the snow melts and buys them back in December?
Investors....not traders will profit from owning NVDQ.
You may be right. Until the company goes positive earnings with consistent growth there will be big holders of the stock that purchased it at $3 or $8 and they will take profits. The rest of the market may not be able to absorb the shares and the price could even drop below $18. Long term investing is the only sure way with this company. I can't get good information about sales so I'm in the dark as to their current status. With the Da Vinci I could call up the hospitals or monitor listed surgeons and get a pretty good handle on their performance.
Mr Hiqu (spelling?)
Should the PILLAR II paper be published in the next week and the rollout of the new PINPOINT upgrade model at the SAGES conference (Apr 2-4) be as successful as I think it will, you will be selling your shares for $23 and will have to pay $30 to get them back in May.
So let me try
And come back in May
Why should you cry?
I concur with your assessment. In the next 12-24 months either I will own shares in a growing, going concern with a stock price valued on future cash flows and not "the options pricing model" or I will have a tax loss to use for writing off gains in other areas.
You are correct. The correlation I was referring to was not the type of surgery but surgery in general. The benefits of this new technology increases the real time efficacy of surgery for just about all theaters of surgery.
Thanks for the clarification.
Novadaq has booth #633 a 30'X30' prime booth location on the perimeter of the boths, located between Intuitive Surgicals 50'X40' (largest in Sages) and Ethicon's 40'X40' booths. There is no better location or higher foot traffic I can expect at the conference. If Novadaq can roll out its new PINPOINT, with the PILLAR II results commensurate with their seminal technology breakthrough, expect the stock price to scream higher! There is a paper being presented that may give a hint as to the PILLAR II results:
"ETP056 SINGLE-SITE ROBOTIC CHOLECYSTECTOMY
WITH INDOCYANINE GREEN FLUORESCENT
CHOLANGIOGRAPHY: 72 CASES WITH NO
COMPLICATIONS. Despoina Daskalaki, MD, Mario Masrur,
MD, Kristin Patton, MD, Francesco Maria Biano, MD, Pier
Cristoforo Giulianotti, MD, FACS; Department of Surgery, Division
of Minimally Invasive and Robotic Surgery, University of Illinois
Hospital and Health Sciences System"
Expect great things to come.
Imagine only. It gives doctors and patients enhanced diagnostic tools before treatment begins so better treatment options may be chosen, during the treatment real time adjustments may be applied and after treatment, confirmation of the efficacy of treatment can be affirmed while there is still time before permanent damage is done to the patient.
It adds both understanding and confirmation to the disease / treatment regiment.
I checked out the conference web site. Had a picture of the new LUNA in the Novadaq exhibit but no verbal or written mention of the presentation. I could not tell from the web picture whether the presentation was well attended or not. From the pictures of other exhibits the LUNA seemed to be the one with the most to draw the conference goers attention. It would have been nice to have a video of the exhibits presenters on the NVDQ web site.