Tag - Bsx

www.visa.com
NYSE: V
Scheduled for week of Mar. 17
$16 billion proceeds
$30.8 billion post-money valuation

Finally, there’s a hot IPO. Visa, the king of the credit cards, is going public in the king of all IPOs, the biggest ever in the United States. The company, which operates the world’s largest electronic payments network used for credit and debit transactions, is currently held by a consortium of banks, and they are not selling their Class B and Class C shares. However, they may as well be, as $10 billion of the proceeds (structured as Class A shares) will be used to redeem some of their stock upon the offering. Another $3 billion of the proceeds will be put in escrow for litigation, and the rest will go to general corporate purposes.

The litigation allowance is a bit scary. Visa has four main suits against it, all of which allege different forms of antitrust. The suits have been filed separately by Discover Financial Services (NYSE: DFS), American Express Company (NYSE: AXP), a large group of merchants, and the fourth by a class of consumers. MasterCard Incorporated (NYSE: MA), which went public in 2006, had a similar list of litigation in its prospectus, but it hasn’t held the stock back. It was offered at $39 on May 24, 2006, and currently trades at $191.50. Visa’s betting that investors will see the MasterCard profits and want a chance at the same, lawyers be damned.

Lawsuits aside, Visa is nicely profitable. Pro-forma for the effects of post-IPO share redemptions, the company lost $861 million on $5.2 billion of revenue, although expenses include a $2.7 billion charge for settling litigation with American Express. Revenue was up 33% in 2007 to over the $3.9 billion posted in 2006, thanks in part to a 13% increase in the number of payments processed and a 22% increase in the cash value of these payments.

To try to breathe life into your investing strategy, consider Zoll Medical Corporation (Nasdaq: ZOLL), a company in the business of saving lives with state-of-the-art resuscitation devices.

Considering that a leading cause of death in the United States — sudden cardiac arrest — kills one person every two minutes, or 325,000 people per year, Zoll’s products are crucial and in high demand.

The company manufactures a complete line of resuscitation products, ranging from defibrillators to its AutoPulse device, which Cardiology Today named “Device of the Month” in its January 2008 issue. This noninvasive cardiac support pump provides full chest compressions in place of the manual CPR traditionally administered by emergency medical technicians en route to the hospital. The device can be activated quickly and immediately applied to the patient in an emergency setting.

The magazine reported findings from several studies that demonstrated the AutoPulse’s ability to improve survival rates in patient survival. Data from a 2004 study in the Journal of the American College of Cardiology showed that when comparing use of the AutoPulse versus conventional CPR, the AutoPulse improved brain flow to the heart and brain, and brought patients vital signs to near pre-arrest levels.

Shipments of the AutoPulse, totaling $2.7 million in the three months ended Dec. 30, 2007, were unchanged in comparison to the prior year quarter. Blame that on the fact that demand outstripped supply and created a backlog. However, AutoPulse orders grew more than 40% from Q1 of last year.

For many aging boomers combating heart disease, it is in Merit Medical Systems (Nasdaq: MMSI), a maker of disposable medical products used in radiology and cardiology, that they will find an indispensable ally.

The company is a market leader in many of the products it offers, which include disposable catheters, syringes, inflation devices, disposable blood transducers, angioplasty needles and guidewires, pressure infusion bags, kits and procedure trays, among many other products. The company peddles 72% of its products to U.S. hospitals, custom packagers and distributors, and original equipment manufactures, with the remainder sold in international markets.

The company received notification from the U.S. Food and Drug Administration in December 2007 of 510(k) clearance for its new Sea Dragon torque device, which is used specifically with hydrophilic guide wires. The Sea Dragon follows November's release of the All-Star hemostasis valve, which is designed to maintain a fluid-tight seal around interventional devices, and the  Prelude marker tip introducer sheath, which allows visualization of the sheath tip for precise placement during interventional and diagnostic procedures. 

According to Fred Lampropoulus, chairman, president and CEO of Merit, all three products are high margin and enhance the company’s revenue growth and profitability in 2008.

Merit’s sale have been growing at a compound average annual rate of 11.8% over the past 10 years to an estimated $207.4 million in 2007. EPS, meanwhile, has been repeating and growing as well — at a 16.2% compound annual rate to an estimated $0.54. The stock closed at 16.07 on Friday. Shares have ranged between $10.89 and $16.84 over the last 52 weeks.

Comptition in the space is formidable, to be sure. Merit butts head with the likes of Boston Scientific Corporation (NYSE: BSX), Johnson & Johnson (NYSE: JNJ) and Medtronic, Inc. (NYSE: MDT), but that's OK. The company has been holding its own against these behemoths for the past 20 years and believes it will continue to hold its own because of “quality of materials and workmanship, innovative design, ease of operation and a prompt attention to customer inquiries.” 

For AngioDynamics, Inc. (Nasdaq: ANGO), access is everything. Its many medical devices enter your arterial network and wriggle on through the veins, pinpointing damage along the way. They may remove a varicose vein here, insert a post-surgical drain there, or vaporize an aberrant tumor here, there or most anywhere.   

AngioDynamics supplies radiologists, surgeons, and other physicians with devices for the minimally invasive diagnosis and treatment of cancer and peripheral vascular disease (PVD). The company is positioned to take advantage of the nascent PVD market and — through a recent acquisition — the promising interventional oncology market.

Canaccord Adams analyst Jason Mills estimates that more than 11 million Americans suffer from PVD — often characterized by a narrowing of vessels that carry blood to the legs, arms and certain organs. As people age, vascular problems accelerate. Growth of the multi-billion dollar PVD medical device market is expected at 8% to 10% annually.

Grab your Wikipedia. Mills says AngioDynamics’ portfolio of diagnostic, therapeutic and drug-delivery catheters targets several key PVD sectors, including angiography (imaging/diagnostics), image-guided vascular access (imaging and drug-delivery of chemotherapy drugs for cancer patients), venous disease (therapeutic ablation), thrombus removal (therapeutic drug delivery), hemodialysis catheters and interventional oncology (radiofrequency tumor ablation, resection, drug delivery).

If you followed that, you are ready for AngioDynamics’ kicker: RITA Medical Systems. RITA, purchased by AngioDynamics at the end of January 2007 for $220 million, specializes in radiofrequency ablation — a treatment option for patients with liver tumors and painful metastatic bone tumors. It is a medical technology that uses heat to destroy tumors in a less invasive way than traditional methods.

Investing in companies that make medical devices can be risky, to say the least. In a highly competitive industry in which the prototypical business model involves years of painstaking research and development (not to mention the time-consuming process of obtaining FDA approval) before translating into revenues, winners have to overcome competitive threats, pricing pressures, and quality issues.

According to industry experts at Standard & Poor’s, when evaluating a medical device company's competitive position, it's crucial to examine its track record of product innovation and its market share over time. With that criteria in mind, if any stock in the medical-device group qualifies as a strong holding in the Street's eyes, it's Synovis Life Technologies Inc. (Nasdaq: SYNO). The St. Paul, Minn.-based medical device company shows exceptional annual growth in research and development, and it has a dominant position in its two core market segments: devices used in surgical and interventional treatment of diseases.

The surgical end of the business creates tools for surgeons and hospitals, devices for microsurgery, and implantable biomaterial products (which aid tissue repair and regeneration). The interventional end develops and manufactures components used in minimally invasive devices for cardiac, vascular, neuro, and other surgeries—selling primarily to other medical device companies that use them in the manufacture of their own products.

At first blush, Synovis appears overmatched compared with its peers: healthcare powerhouses Johnson & Johnson, Inc. (NYSE: JNJ), Boston Scientific Corp. (NYSE: BSX) and Medtronic, Inc. (NYSE: MDT). But thanks to a pipeline of products that have propelled sales, the company continues to post impressive profits in the face of formidable competition.

The Russell 2000 and the other major U.S. indices are up following news of better-than-expected retail sales in May. At 11:27 a.m. ET the Russell 2000 had gained 4.29 points, or 0.52%, to 826.01. The Dow Jones Industrial Average was up 61.18 points, or 0.46%, to 13,356.19.

Urban fashion apparel retailer Citi Trends, Inc. (Nasdaq: CTRN) has priced an underwritten secondary public offering of 2,135,000 shares of its common stock at $37.92 per share. All of the shares will be sold by shareholders, which means that Citi Trends will not receive any of the proceeds, the Savannah, Geo.-based company announced before the opening bell. Its stock is up $1.37, or 4%, to $39.29.