Why Luminex Is Poised to Keep Plunging

Market-lagging returns could be written in this 2-Star.

Brian D. Pacampara, CFA
Brian D. Pacampara, CFA
Feb 8, 2013 at 9:48AM
Health Care

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, biological testing technologist Luminex (NASDAQ:LMNX) has received an alarming one-star ranking.

With that in mind, let's take a closer look at Luminex and see what CAPS investors are saying about the stock right now.

Luminex facts

Headquarters (founded)

Austin, Texas (1995)

Market Cap

$730.6 million

Industry

Life sciences tools and services

Trailing-12-Month Revenue

$202.6 million

Management

CEO Patrick Balthrop Sr. (since 2004)
CFO Harriss Currie (since 2003)

Return on Equity (average, past 3 years)

4.4%

Cash/Debt

$56.4 million / $2.8 million

Competitors

Affymetrix
Life Technologies
Sequenom

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 14% of the 106 members who have rated Luminex believe the stock will underperform the S&P 500 going forward.

Earlier this week, one of those bears, All-Star bclan13, succinctly summed up the bear case for our community:

Other technologies are coming in and taking away more and more of where Luminex's performance envelope has a competitive advantage (lab geeks' "mid-plex"). I see particular pressures in genetic disease testing. ... Longer term, there is a stable business for Luminex in [Human Leukocyte Antigens ] testing (particularly the protein tests) but this is not going to provide double digit growth forever -- a requirement of a company with this kind of valuation.

Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.