A couple of weeks ago, I introduced Fool readers to my nomination for the best bargain in the health-care industry -- a company that, according its fans over on the Yahoo! Finance boards, could quite possibly be the cheapest stock ever. AngioDynamics
Many companies take many different approaches to cancer treatment. General Electric
But is it succeeding?
Killing cancer, growing cash flow
In a word: yes. Many investors were upset with Angio's first-quarter performance last week, but I think the company's working out just fine. Criticism seems to center on Angio's earning only $0.08 per share (adjusted), or $0.03 less than projected. Wall Street also wasn't pleased to see the company grow revenues only 5.6%, versus a hoped-for 8.5%. But if you're like me, and you think the real promise at Angio lies in its Oncology/Surgery business, and specifically the NanoKnife surgical ablation device, it's hard to fault Angio's performance.
O/S was Angio's strongest performer last quarter, with sales up 15% year over year. In particular, NanoKnife revenues spiked more than 100%, rising to $2.3 million, and now make up nearly 13% of this division's sales. The number of patients who have "gone under the NanoKnife" recently passed 800 -- a level at least 16% higher than where we stood just three months ago -- and shows no sign of slowing down. To the contrary, new CEO Joseph DeVivo (a great name for a health-care CEO, I might add) says that "key opinion leaders have confirmed to me the significant opportunity ahead for the NanoKnife System."
Call me an optimist, call me a Fool, but I think the opportunity for investors is just as "significant." Free cash flow at the company now stands at $32.4 million for the past 12 months -- more than 4 times reported earnings at Angio. At an enterprise value-to-free cash flow ratio of just 6.8, the stock looks even cheaper than the last time I recommended it.
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Fool contributor Rich Smith does not own shares of, nor is he short, any company named above. You can find him on CAPS, publicly pontificating under the handle TMFDitty, where he's currently ranked No. 302 out of more than 180,000 members.
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