Well, how about that, huh? Unless you invest in penny stocks, you don't see too many days where a stock you own goes up 20%, but that's what investors in FoxHollowTechnologies (NASDAQ:FOXH) enjoyed yesterday as this emerging med-tech company posted a quarter that certainly pleased the Street.

The basic gig at FoxHollow these days is all about selling more of the SilverHawk devices, a catheter-based approach to treating blocked vessels in the legs that mechanically removes the plaque. Think of it kinda, sorta, like a Roto-Rooter for the legs.

In any event, revenue was up 68% this quarter, with product sales climbing 67% from last year and 8% from the first quarter. The remainder of revenue, a small amount in this quarter, was from the company's research partnership with Merck (NYSE:MRK). Gross margins improved significantly (from 69.1% to 76.6%), and though the company posted an operating loss on a GAAP basis, it did manage a bottom-line profit. If you opt to exclude stock compensation expense from the picture, operating income came in at about 2.7 million, or 5.7% of revenue.

New product development also continues. The company launched the MiniHawk, which will allow doctors to offer the same sort of treatment below the knee (where the vessels are narrower), and completed development of a prototype for the NightHawk which adds intravascular imaging to the basic SilverHawk function (so that doctors can see what they're doing in real-time). Here's hoping it's better than the Sylvester Stallone/Billy Dee Williams movie from the '80s.

Even as an investor in this company, I have my concerns. The company announced that the vice president for marketing is leaving the company, and that continues the churn in management. What's more, competitors like Spectranetics, BostonScientific (NYSE:BSX), Bard (NYSE:BCR), and Johnson & Johnson (NYSE:JNJ) aren't going away, and FoxHollow has yet to prove that it can establish itself as the gold standard in peripheral artery disease treatment.

I'm not sure how long I'll be a FoxHollow shareholder, but it's tempting to stick by FoxHollow and its founder/CEO Dr. John Simpson (no relation). He has an excellent track record with founding and then selling med-tech companies (including selling Guidant to Lilly (NYSE:LLY) and Perclose to Abbott Labs (NYSE:ABT)), and while past performance doesn't guarantee the future, it's still a positive in my view. In the meantime, here we have a fast-growing med-tech company with a growing suite of technology to address a serious medical problem and a decent valuation to boot.

For more medical missives from The Fool:

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Fool contributor Stephen Simpson owns shares of FoxHollow and Johnson & Johnson, but has no financial interest in any other stocks mentioned (that means he's neither long nor short the shares). The Fool has a disclosure policy.