Why AngioDynamics Shares Tumbled

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of AngioDynamics (NASDAQ: ANGO  )  -- which makes medical, surgical, and diagnostic devices in the vascular and oncology arena -- tumbled as much as 16% after reporting its preliminary third-quarter earnings results.

So what: Although these results are unaudited, they paint a pretty stark miss for AngioDynamics. For the quarter, it expects to report revenue of approximately $82 million and EPS of $0.04-$0.06 versus the $89 million to $90 million in sales it had previously forecast. Wall Street had been expecting the device maker to turn in a profit of $0.09 on $87.8 million in sales. AngioDynamics blamed the shortfall on sales attrition in its vascular access segment, procedure volume softness in its peripheral vascular segment, and capital equipment purchase delays in its oncology/surgery segment.

Now what: This is a bit of a toss-up because these all could very easily be short-term issues. Then again, procedure softness and sales attrition could easily signify a shift away from AngioDynamics' products which would negatively impact its sales for more than just one quarter. Beyond making acquisitions, AngioDynamics' organic growth isn't anything to write home about -- sales are expected to grow by just 7% in 2014 according to the Street's estimates -- so at 22 times forward earnings, I'm more than happy to stay on the sidelines.

Craving more input? Start by adding AngioDynamics to your free and personalized watchlist so you can keep up on the latest news with the company.

While you can certainly make huge gains in device makers like AngioDynamics, the best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.


Read/Post Comments (1) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 22, 2013, at 2:37 AM, claire1961 wrote:

    ...sales are expected to grow by just 7% in 2014 according to the Street's estimates -- so at 22 times forward earnings... ??

    that's really too positive ... walking 4 mln behind target this quarter and having opex budgets > 20 mln?

    Time for recovery and turnaroundmanagement supported by the new CFO.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2302494, ~/Articles/ArticleHandler.aspx, 10/24/2014 3:04:40 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Apple's next smart device (warning, it may shock you

Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early-in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!


Advertisement