For you readers who wonder what it's like to write for The Motley Fool, allow me to provide a little insight into one small piece of the day-to-day life.
So, I write about Cytyc
Since that time, the stock is up about 23% and is near a 52-week high. And today we also see that revenue grew about 25% in the fourth quarter, net income grew 31%, and operating cash flow was up about 28% for the full year. Hey, if that's doomed, I wish more of my portfolio were doomed .
So far, at least, so good. While Cytyc's revenue in the domestic diagnostics business was up 6% for the period, international diagnostics revenue was up 36% and surgical products sales were up 80%, as reported.
But isn't that slow growth in the domestic diagnostics business a reason for concern? Yes and no. It's likely that Cytyc isn't going to reap a huge amount of top-line growth here again, barring the introduction of a major new technology or feature. But it has a dominant position in the marketplace and it still reaps considerable cash flow from the business. In other words, it's an annuity. Sure, there will be threats (like a new low-price test likely to be approved, then distributed by Cardinal Health
Overall, I still like this company's future. No, it's not as big or secure as Abbott Labs
Now with all that said, the stock still doesn't look cheap. It looks pretty much at fair value by cash flow, and the price-to-sales ratio is high (for all its limitations, price-to-sales has often been a popular metric for med-tech companies). Then again, I'm trying to remember the last time this stock looked really cheap and I can't immediately recall. So while I'm not recommending anybody rush out to sell it, just keep an eye on the valuation and the size of your position in Cytyc relative to your overall holdings.
For more medical technology missives:
Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).