A Big Upgrade for Electro-Optical Sciences

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Every day, the sun rises on Wall Street, and a plethora of professional analysts wake to issue new opinions on stocks. Here at the Fool, we use our "This Just In" column to examine some of these picks-- and the track records of the companies behind them -- so individuals can make better investing decisions.

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After Electro-Optical Sciences (Nasdaq: MELA) spent the past several months at no better than a four-star ranking, enough top-performing CAPS members have become  bullish on it recently to upgrade it to the highest possible five stars. A total of 139 members have given their opinion on the medical-devices company, with many of them offering analysis and commentary explaining the recent optimism.

Melanoma is the deadliest form of skin cancer and is often described as a graveyard for drugs because there are few treatments available. While Schering-Plough (NYSE: SGP) seeks approval for one of its drugs and Bristol-Myers Squibb (NYSE: BMY) has one in clinical trials, many others like Pfizer (NYSE: PFE) have failed in trying to market a treatment in the past. The Food and Drug Administration has put Electro-Optical Sciences' melanoma detection device, called MelaFind, on the fast track, with a decision coming as soon as the end of the year. Test results in February showed that MelaFind found 98% of the detectable melanomas in nearly 1,400 patients, while causing no adverse side effects. General Electric (NYSE: GE) and Siemens manufacture PET/CT scanners for early detection, but Electro-Optical's MelaFind is expected to play a big role in early detection if it is approved.

While other medical-devices companies such as Intuitive Surgical (Nasdaq: ISRG) and Boston Scientific (NYSE: BSX) have established histories and generate healthy revenue, Electro-Optical has no revenue or earnings yet and has relied on equity financing to get by. Some CAPS members write that the company is a speculative play, while some are drawn to MelaFind's potentially huge market and like the device's chances of winning approval.

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