Business continues to boom for many small- and mid-cap diagnostic companies. A prime example of this trend is the blood-testing equipment maker Immucor
It was another strong quarter for the company, and its shares have gone up another 9% today. The stock continues to be on an absolute tear. It is up more than 60% over the past 52 weeks. Immucor's Q1 earnings increased by 39% on a 25% increase in sales versus its year-ago quarter.
What is especially striking for investors to note is how the company achieved these strong gains. Despite having a market cap of just over $2.4 billion, the company does have pricing power. About 70% of the Immucor's incremental gains in total sales, when compared with the prior year, came from price increases. This favorable pricing also allowed the company to improve its gross margin significantly -- from 68% to 72%.
It might be seen as a slight risk that only 25% of its incremental gain in sales came from volume improvement, but when a company ratchets up prices considerably, it becomes less of a worry. Not to mention that excluding the price increases, revenues would still be up a respectable 8% year over year.
While Immucor continues to be a strong player in this sector, there are others. Among them are Meridian Bioscience
Even if the sight of blood makes you queasy, Immucor is one growth stock with the potential to cure you of that trepidation.
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