Small cap health care stocks Myriad Genetics (NASDAQ: MYGN), Vascular Solutions (NASDAQ: VASC) and USANA Health Sciences (NYSE: USNA) are all scheduled to report earnings after the market closes today. That means traders and investors alike have one more trading day to place a bet on what direction these three small cap health care stocks could head in when the market opens on Wednesday as two of them are facing important catalyst that could impact their future performance. So what should be your trading or investing strategy? Here is a closer look at what to look for:
Myriad Genetics (NASDAQ: MYGN) Is Awaiting an Important Supreme Court Decision
Myriad Genetics is a molecular diagnostic company dedicated to making a difference in patient’s lives through the discovery and commercialization of transformative tests. On Monday, Myriad Genetics fell 0.88% to $26.92 (MYGN has a 52 week trading range of $22.02 to $31.80 a share) for a market cap of $2.19 billion plus the stock is up 12.9% over the past year and up 28.2% over the past five years. Back in December, the Supreme Court said it will make a decision on a case involving two patents that are related to Myriad Genetics' BRACAnalysis test – the source of more than 80%+ of the company’s revenues. The problem for investors and for Myriad Genetics is that the Supreme Court may be more interested in making a broad ruling about the patenting of genes. If the Supreme Court overturns the patents or rules that human genes cannot be patented, Myriad Genetics still holds other patents that support the test. Nevertheless, investors might want to pay attention to any discussion of the case when Myriad Genetics reports earnings.
Vascular Solutions (NASDAQ: VASC) Looks Forward to Delivering 9 Years of Double Digit Revenue Growth
Vascular Solutions calls itself an innovative medical device company that focuses on developing unique clinical solutions for coronary and peripheral vascular procedures. Currently, Vascular Solutions has a product line consisting of over 60 products in three categories: catheter products, hemostat products and vein products. On Monday, Vascular Solutions fell 1.97% to $15.94 (VASC has a 52 week trading range of $10.09 to $16.99 a share) for a market cap of $260.08 million plus the stock is up 45.2% over the past year and up 164.3% over the past five years. Back in October, Vascular Solutions announced that it would spend $8 million to buy a building next to its headquarters in order to make room for its growing staff. Otherwise and the last time Vascular Solutions reported earnings, it reported a 13% increase (excluding a onetime licensing fee in the same period last year) to $20.6 million with US product sales rising 15% to $20.6 million and international product sales rising 9% to $3.9 million. Gross margin across all product lines rose from 65.2% to 66.6% while net income for the third quarter came in at $2.6 million – up from $1.7 million (excluding the two one-time items). Vascular Solutions’ CEO pointed out that the company is looking forward to delivering its 9th consecutive year of double digit revenue growth.
USANA Health Sciences (NYSE: USNA) Is Under a Cloud Cast from Herbalife
USANA Health Sciences develops and manufactures science-based nutritional and personal care products and it has operations in 15 markets worldwide where it distributes and sells its products by way of direct selling. On Monday, USANA Health Sciences rose 3.4% to $35.86 (USNA has a 52 week trading range of $30.51 to $50.23 a share) for a market cap of $517.3 million plus the stock is up 0.25% over the past year and down 17.5% since early 2011. The upcoming earnings release and any conference call for USANA Health Sciences will be interesting because the company is being tarred and feathered with Herbalife (NYSE: HLF) which is is under assault by Bill Ackman for allegedly being a Ponzi scheme. That would help to explain the relatively low trailing P/E of 8.83 and forward P/E of 7.41 (Note: USNA pays no dividend). However and until the controversy over Herbalife blows over, one way or the other, investors and traders alike will probably want to stay away from USANA Health Sciences. On the other hand, now or later (should Herbalife’s problems continue to drag on) might be a good time to get into USANA Health Sciences rather cheaply. Just be aware that according to HighShortInterest.com, USANA Health Sciences is now the third most shorted stock on the market with current short interest of 54.68%.
The Bottom Line. Investors who aren’t traders or into shorting stocks might want to stay away from small cap health care stocks Myriad Genetics and USANA Health Sciences while Vascular Solutions looks set to continue its solid stock performance.