Abaxis, Inc. (ABAX)

Weakening Earnings Opinion

BLUD is a much better play here. ABAX hs reached it's potential. There is not much room to move any higher. BLUD on the other hand has been beaten down like it stole something due to a recent FDA investigation which will likely not have any substantial effect on the company as it has spent 4 million to rectify issues identified by the FDA.

Abaxis develops, manufactures and markets portable blood analysis systems for use in any veterinary or human patient-care setting to provide clinicians with rapid blood constituent measurements. The system consists of a compact, 5.1 kilogram (11.2 pounds), portable analyzer and a series of single-use plastic discs, called reagent discs that contain all the chemicals required to perform a panel of up to 13 tests on veterinary patients and 14 tests on human patients. The system can be operated with minimal training and performs multiple routine tests on whole blood, serum or plasma samples. The system provides test results in less than 12 minutes with the precision
and accuracy equivalent to a clinical laboratory analyzer.
6/30/09 Quarterly highlights include:
-- Revenues of $29.6 million, up 21% over last year's comparable
quarter.
-- Veterinary market sales of $21.8 million, up 31% over last year's
comparable quarter.
-- North America revenues of $24.1 million, up 19% over last year's
comparable quarter.
-- International revenues of $5.5 million, up 29% over last year's
comparable quarter.
-- Medical and veterinary reagent disc sales of $18.4 million, up 31% over
last year's comparable quarter.
-- Gross profit of $17.2 million, up 27% over last year's comparable
quarter.
-- Operating income of $5.7 million, up 42% over last year's
comparable quarter.

-- Net income of $3.8 million, up 35% over last year's comparable
quarter.

Looks like a decent company, but it's priced too high

Healthcare spending is going up, in part because of healthcare reform. Rising on 5 times average volume. Q2 profit soared.

Animal health assets after Sanofi Merial buyout for 2X what the market was thinking it would be worth previously

Fortune 100 small business winner.

Abaxis just added a huge new revenue stream by taking over contracts for the I-STAT point-of-care analyzer cartridges. This revenue previously belonged to Heska Corporation. Not sure how Abaxis pulled this off, but it is big news for Abaxis and bad news for Heska. This cartridge business is good money - anyone who uses an I-Stat analyzer will tell you it is a great unit, essential to quality veterinary practice. And those little cartridges are spendy!

I gained 52% (october 2008 - march 2009). A good stock. At least in this kind of market.

Good product lineup, renewable revenue stream.

Abaxis Inc is a medical equipment company that sells Piccolo blood test machines. The company has greatly increased numbers and created long term contracts through point of sale. The company sells its machines primarily in the United States and also has a presence in Japan through a distribution deal.

According to the October 29th issue of Forbes magazine the company closed deals with 60% of MDs that it attempted to sell to. The Piccolo machines sell for $15,000 and use discs exclusively sold by Abaxis which provides a nice revenue stream. The number of offices with the machine was at .2% in this article. At the time of publication the company was just entering the veterinary field as well.

Forbes named Abaxis #11 in its annual best small companies in 2007. Previously in 2006 the company was listed at 25. Perhaps the biggest honor was Abaxis's CEO named entrepreneur of the year by Forbes for 2007.

Abaxis has a market cap of between $500 million and $750 million currently which makes it a growing small cap with plenty of room to grow. The company has no debt on its books. The company is represented in the S&P 600 Smallcap and S&P 1500 Supercomp.

A new machine was launched in September of 2007 called the HM5. The company just announced record sales for both the 3rd and 4th quarters of fiscal 2008. The discs used for the machines are being sold at a higher price and are recognized at a lower cost to make which will increase profit margins over the next year substantially. International sales make up 16% of the company's sales.

Abaxis sold 32 instruments at the North American Veterinarian Conference. The company sold 105 Piccolo human blood test machines in the month of Decmeber 2007. Eight hundred and eighty instruments total in the third quarter of 2008 and has the capacity to make 1000 instruments a quarter now and an unlimited potential with the addition of new vendors according to the conference call for the third quarter.

The company said they had a goal of $1 per share in earnings for fiscal 2008. I see them exceeding this and creating great shareholder value by producing more disks and tapping the international market. They also had announced that they planned to explore heartworm tests on animals using their machines. Shares have been as high as $40 the past 52 weeks. The shares are currently at $29.41 in after hours trading. I have a price target of $45 by 07/01/10.

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http://stockworldpicks.blogspot.com

Serves both lower cost clinics with blood testing equipment and also pets/veteranarian market with similar products. Razor/razor blade model as blood reagent sales exceed machine sales, and each new customer sets up profitable long term repeat business. Highest profit segment now growing fastest. Also provides more tests faster and cheaper than

This is a good trading stock with very good fundamentals behind it. It has started an upward movement from $22 and I am watching the technicals to make sure there is some momentum behind this move. Beta is 1.45 so it can get some good moves with the market. Looking for it to go back to the 52 week high of $40.

Testing a portfolio of companies that start with the letter "A".

Abaxis has a solid niche in the veterinary point-of-care diagnostics business augmented by an open-ended growth opportunity in human point-of-care diagnostics thanks to its unique Piccolo Xpress machine. The business model is classic razor-and-blade, with the machines (razors) selling at about a 50% gross margin, while the routers (blades) sell for closer to a 70% GM. There remains room for expansion of GMs, primarily on the router side, and new distribution contracts should improve volumes, along with CLIA waivers for multiple diagnostic tests.

One thing I have learned is don't argue with the market. This stock is heavily owned by institutions and it appears that they want to buy more. It has a huge growth potential both in America and the rest of the world.

Price above all moving average lines.

All the hard work is done, soon it should be all in the FDA's hands. When approved cash flow will be the name of the game for this small company.

Good growth and earnings.