Profiles composed by Keith Kern (STT)
This "Story Stock" section will be used to profile stocks that we believe have very strong fundamental reasons for large price appreciation as well as good technicals. Stocks listed in this new section will be intended as longer term holds, i.e. weeks to months in order to come to fruitation. Unlike stock picks highlighted in the "Longs" section, a stock highlighted in the "Story Stock" section is intended to be held and not day traded.
Updated 12/14/04 Closing out PRFT for 51% gain!
Recent story plays:
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Date
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Symbol
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Updates
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10/9/03
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FARO
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100% gain! Faro has hit target for 100% gain. All positions closed. |
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2/4/04
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SUHG
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98% gain! SUHG comes close to target but is closed out in favor of some better better risk/reward scenarios. |
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12/14/04
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PRFT
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51% gain! Closed out simply because of an extreme move in the price in a rapid period of time. |
Date: 2/4/04
Price: $5.27
Yahoo Profile: http://finance.yahoo.com/q/pr?s=ATSI
Brief summary:
ATSI caught my attention more and more as news has surfaced over the months. To describe why I believe ATSI is an intriguing story, I’d like to provide numerous links as the story has unfolded and will summarize after each link.
Villafana Makes “State of the Union” Report on ATS Medical
http://www.biobn.com/index.cfm?Page=viewnews&NewsID=0001779566
This news release basically tells us that ATSI believes they have the best product in the mechanical valve replacement industry, but continue to lose sales. As a drastic result, Chairman Villafana decides to clean house and cut the fat in operations. He is looking for a new CEO, is reducing facilities, and will reorganize the entire sales team.
Villafana Announces ATS Medical’s New President and CEO
http://www.biobn.com/index.cfm?Page=viewnews&NewsID=0001803360
ATSI announces the hiring of Michael Dale. Dale comes to ATSI from St. Jude Medical where he started from an entry position and worked his way up to Worldwide Product Manager. Why is this especially interesting? St. Jude’s is the leader in mechanical valve sales. You will see some other interesting new employees and intriguing backgrounds shortly.
Villafana Discusses the first 100 days of Newly Reorganized ATS Medical
http://www.biobn.com/index.cfm?Page=viewnews&NewsID=0001823633
The goal here is to increase sales as fast as possible. Can they do it? The first 100 days seems to be very promising up to this point. ATSI is now reducing costly inventory and continues to grow the sales force quickly. Also key in this announcement is the agreement to no longer have the contractual obligation to buy its product from Carbometrics. This will allow ATSI to manufacture the same product in house at half the cost.
ATS Medical Strengthens Sales and Marketing Leadership
http://www.biobn.com/index.cfm?Page=viewnews&NewsID=0001860140
ATSI announces two key positions filled. Richard Curtis will serve as VP of Marketing and Business Development. Curtis comes to ATSI from Cardinal Health and St Jude’s Medical. Kevin Peterson will serve as Product Marketing Manager. Peterson comes to ATSI from St Jude’s Medical. Starting to see a pattern here?
Can we be assure the valve is superior to the competition? See for yourself:
http://www.biobn.com/index.cfm?Page=viewnews&NewsID=0001981657
http://www.ncbi.nlm.nih.gov/entrez/query.fcgi?cmd=Retrieve&db=PubMed&list_uids=12607652&dopt=Abstract
Here are Mr. Dales comments on the last two links: “We are very excited about the addition of these compelling studies to our growing compendium of clinical data. Our unique design represents an important evolutionary improvement in mechanical heart valve design.”
ATS Medical Announces New Board Member
http://www.biobn.com/index.cfm?Page=viewnews&NewsID=0001903636
Siverston joins the board with this interesting history: “During his tenure with St Jude’s medical division, revenue grew from 25 million to more then 260 million in heart valve product sales.”
ATS Medical Announces VP of Sales
http://www.biobn.com/index.cfm?Page=viewnews&NewsID=0001925271
Mr. Sportsmen comes to ATSI after having served as an VP at St Jude Medical. Starting to see a trend? Keep in mind here who is the current leader in mechanical valve sales.
ATS Medical Announces New Board Member
http://www.biobn.com/index.cfm?Page=viewnews&NewsID=0001965916
Key line in this announcement: “Mr. Munzenrider served as a CEO for a variety of companies including St Jude Medical.”
ATS Medical Announces 2nd Quarter Results
http://www.biobn.com/index.cfm?Page=viewnews&NewsID=0001990970
So how are sales going you might be thinking? Simply put: Very, very well. “Despite having less then half our planned sales team trained and in place, revenue increased 23% over first quarter 03 and 38% over same quarter a year ago.”
ATS Medical Announces $12.3 Million in Private Placement of Common Stock
http://www.biobn.com/index.cfm?Page=viewnews&NewsID=0001996711
Why is this bullish in nature? We already know that ATSI no longer has to buy their valves from Carbometrics, but they still owe them $40 million from previous orders. The $12 million happens to be the negotiated price that Carbometrics will except with the agreement of canceling the balance of $28 million. This was a great negotiation in my opinion. Carbometrics needed the cash because of a pending lawsuit and ATSI needed to rid itself of that ugly bill. Both parties made out. Now all we have to do is keep selling expensive inventory so that the in house product that is half the cost can replace it. Things seem to be lining up for ATSI. The fact that ATSI was able to get the 12 million in a private placement tells me that there are some big investors out there who wanted in this opportunity.
ATSI Appoints CFO
http://www.executiveselect.com/leadersarch/2003/finance/oct/1014-1.htm
Jack Judd doesn’t come from St. Jude Medical but he does come from American Medical Systems. I may like that background even better.
Chart:
http://stockcharts.com/def/servlet/SC.web?c=atsi,uu[h,a]wacayiay[d20000605,20041218][pc50!b200][vc60][i][j24524154,y]&listNum=39
The chart seems to be setting up long term and ready to come out of a long base. The 6 area seems to be significant resistance with a technical target of 12 longer term upon a breakout.
Target: $12
DISCLAIMER: I have personally established a position in this stock with an average price of 5.485. I also intend on strategically buying more based on the action on the chart. My intent is to hold until either the target is hit or the story for some reason changes.
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