An Upbeat Investment for VNS Therapy
Josef Ray is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
It is the seventh consecutive quarter that Cyberonics (NASDAQ: CYBX) has reported a major increase in their income and this has been translating well for the company in terms of stock price. Yearly revenue reports from Cyberonics also project notably outstanding results with a 4-year upward trend in profits. With this excellent performance exhibited by Cyberonics in the market, and with recent developments and innovations by the company in the field of medicine, investors will be looking at a good long-term venture.
Cyberonics is a revolutionary medical technology company that is engaged in the creation, production, improvement, and distribution of implantable medical devices, especially in the field of neuromodulation. Established 1987, it has already expanded its sphere of influence in various continents by direct and independent distributions and by establishing subsidiaries in different continents of the world. Some of the subsidiaries created by the company are Cyberonics Holdings LLC, CYBX Netherlands C.V., Cyberonics Spain, S.L. and Cyberonics Latam S.R.L. in Latin America. Completion of the facility in Latin America would ensure regulatory flexibility and maximum efficiency with regards to the company's international manufacturing and sales.
In its most recent quarterly release, Cyberonics reported an excellent 17% boost in its net sales from last quarter. One of the major factors that contributed to this outstanding performance is the continuous efforts of the company to develop its products, especially its trademarked VNS Therapy System. VNS Therapy utilizes an implantable pulse generator that has been approved by the Food and Drug Authority and various regulatory boards across the globe for the treatment of refractory epilepsy. In 2005, the FDA approved the use of VNS Therapy also for patients suffering with chronic and recurring depression.
The company continues to improve, not only its international efforts, but also the quality of its VNS Therapy System with the partnerships and investments it engages in. Cyberonics announced recently a license agreement with Imricor Medical Systems, a company based in Minnesota that is the lead innovator in Magnetic Resonance Imaging (MRI) electrophysiology tools. Cyberonics also declared a huge €2 million investment in cerbomed GmbH, a privately-held medical device company based on Germany that is also into development of neurostimulation devices for epilepsy treatment. This venture by Cyberonics is expected to generate fruitful results as it would extend the influence of the company to greater European countries as the NEMOS® t-VNS device is now commercially available in Australia and Germany. With a tremendous amount of 3 million individuals who are suffering with epilepsy in Western Europe, as according to the World Health Organization (WHO), this endeavor by Cyberonics in the European market would translate to good profit. This was proven in the company’s fiscal 2013 report of international net sales increase to $11.1 million from fiscal 2012’s $8.6 million.
Apart from promising international performance, investors should be looking out for the company’s Returns on Investment (ROI) measure. Even as a small cap company, Cyberonics rates second in terms of ROI measure with 21.95% compared to its rival companies like Medtronic (NYSE: MDT) at 12.88%, St. Jude Medical (NYSE: STJ) at 9.70% and Hologic, (NASDAQ: HOLX) at a negative 0.96%. These companies are strong enough to challenge Cyberonics to enhance its performance in the market.
A good ROI signals the confidence the market places on the company and should signal investors to put their bets on this one. Each company has the ability to surpass the others, but Cyberonics always manages to balance all aspects of and movements in the business, making it have an advantage against its competitors.
As a part of the medical sector, Cyberonics is one of the companies whose would not be compromised as much even with economic dips in the market because of the consistent demand for medical aids and services. Cyberonics’ strength in the stock market was demonstrated with analysts’ continuous placement of the company in their list of top stocks. With Canaccord Genuity, amongst other notable analysts, raising the company’s target price to $57, Cyberonics positions itself among 6 Healthcare Stocks Positioned For High Growth and 3 Rallying Medical Device Stocks With Strong Sources Of Profitability and finishes with an outstanding 8 out of 10 Reuters analysts rating it as Buy and Outperform.
JosefRayDagatan has no positions in the stocks mentioned above. The Motley Fool owns shares of Medtronic and St. Jude Medical. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!