To determine whether a company is one of the best stocks to buy now requires a detailed analysis of that company. In our “In Focus” reports we perform a more detailed analysis of one of the roughly 2,000 companies we follow. In this report, we will report on ABIOMED Incorporated (ABMD).
ABIOMED (ABMD) is a leading provider of medical devices in circulatory support and technologies designed to assist or replace the failing heart. Its products in include the Impella 2.5 catheter (a percutaneous micro-hear pump), Impella CP (provides partial circulatory support), and Impella LD (a percutaneous micro-hear pump with integrated motors and sensors).
The company was founded in 1981 and it is headquartered in Danvers, Massachusetts
ABMD has experienced tremendous and sustained growth over the most recent business cycle. Its sales have grown by roughly 15 percent per annum. This performance places it in the 10 percent of all the stocks we cover.
It is also nice to see that in the last few years its profits and cash flows each turned positive. Previously each had exhibited a long string of negative entries. Its free cash flows are still mostly negative. But this is normal for a rapidly growing company.
Furthermore, we feel its future growth outlook is nearly as rosy. ABMD simply occupies a very unique and necessary niche in our economy and it should reap the benefits of this position for the foreseeable future.
The question is whether ABMD is now worth its lofty price. The stock has skyrocketed by 300 percent in just over a year (it was selling for as little as $ 25 near the end of 2014). Currently, it is very richly priced in terms of profits, sales, relative sales or almost any other number investors usually use as a standard.
We answer this question in the following way. We feel ABMD’s overall fundamentals are only average. It is a rapidly growing company. But the market has factored this tremendous growth into the price. Consequently, the stock is fairly priced, and we do not consider ABMD one of the best stocks to buy now.
Stat Sheet – ABIOMED Incorporated 4/29/16
|Industry||Medical Equipment & Supplies|
|Market Cap||$ 4,102|
|Growth Prospects||Above Average|
|Price Volatility||Above Average|
(Our assessment of this firm’s fundamentals will be in effect for the rest of calendar year 2016.)
We cover 2,000 companies. If you would like to see more research on all these companies, click the link below.
If you would like to learn why we have a weakness for the best dividend stocks, click the link below.
Disclaimer – Information contained herein has been obtained from sources believed to be reliable. Neither the author nor the publisher guarantees the accuracy or completeness of the information and methods described. This information is offered as general commentary only. It is not intended as investment advice. Investment and trading of securities involves risk, including of loss of capital. Market conditions change over time, and no assurance can be given that a reader may apply the principles described to make a profit. The author and publisher expressly disclaim all and any liability to any person for any investment or trading decisions that the reader may make in reliance on this information.