Editor's note: This article is a stock pitch made by a member of CAPS, The Motley Fool's free investing community. The pitch is published UNEDITED and is the opinion of the CAPS member whose pitch it is, in this case: zzlangerhans.
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|Stock Price at Underperform Recommendation||$9.62|
|Star Rating (out of 5)||**|
|Industry||Medical Instruments and Supplies|
|Market Cap||$417 million|
Source: S&P Capital IQ, Yahoo! Finance, and Motley Fool CAPS.
This Week's Pitch
OraSure stock has been on an upswing since receiving notification of receipt of a CLIA waiver allowing them to market their OraQuick HCV test to outpatient clinics and physician offices. I see the greatest usefulness of the quick HCV test as a rapid screen to weed out unusable blood product donors. HCV might be an important condition to screen for in those other outpatient settings, but why does the result of that test need to come back right away while other equally important tests go to the lab? It's not like you're going to get a prescription for Incivek as you walk out the door. Even if the CLIA waiver ends up increasing test revenues, the effect likely won't be seen for several quarters as the company continues to burn cash and reserves get lower. The same goes for the OraQuick OTC HIV test, which has just completed clinical testing but won't be acted on by the FDA for months. Quarterly burn has been 2-4M and cash reserves were 21M as of the last PR.