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Masimo Wins Over a Major Hospital

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Masimo Corporation (MASI), a leader in non-invasive patient monitoring know how, recently revealed that the Albany Medical Center of north-eastern New York had adopted Masimo rainbow SET Pulse CO-Oximetry and sensor set up.

This adoption arms the Albany Medical Center with path breaking rainbow know how that permits medical practitioners to gauge several blood components, respiration and different physiological measures without needle-based blood withdrawals and slow- moving laboratory tests.    

Albany Medical Center includes both the Albany Medical College and the 651-bed Albany Medical Center Hospital. The Albany Medical Center Hospital caters to over 32,500 inpatients and over half a million outpatients each year.

Earlier, in the second quarter of 2012, Masimo completed the strategic acquisition of PHASEIN AB of Sweden. The purchase price was $30 million. PHASEIN is a provider of sidestream and mainstream capnography offerings. It had sales of about $10 million. This acquisition provides the company with another set of measurable variables using its know-how. It is expected that earnings per share will be neutral in 2013 and subsequently turn accretive.

Masimo is a market leader in the pulse oximetry monitoring equipment industry. The company’s prospects are encouraging, given the sizeable global market opportunity, adoption of pulse oximetry in non-critical areas of the hospital and growing barriers to entry due to additional non-invasive parameters.

Shipments have been growing at a steady rate fueled by new contracts. However, the renewal of the royalty agreement with Covidien (COV) provides little or no benefit due to lower rates. Further, competition is intense and Masimo partly depends upon its Original Equipment Manufacturers (:OEM) partners for sales. We currently have a Neutral recommendation on Masimo. The stock currently retains a Zacks #3 Rank, which translates into a short-term Hold rating.

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