Why You Need to Watch This Small Cap Medical Device Stock This Week
Small cap medical device and spinal implant stock Globus Medical Inc (GMED), a peer of NuVasive (NUVA) and Alphatec Holdings (ATEC), is rising and there is reason to believe it will continue to do so this week.
On Monday, small cap medical device and spinal implant company Globus Medical Inc (NYSE: GMED), a peer of small caps like NuVasive (NASDAQ: NUVA) and Alphatec Holdings (NASDAQ: ATEC), rose 7.88% to $14.65 on double the normal trading volume. The stock also made solid gains on Friday. However, the real action for small cap Globus Medical could come later this week.
What is Globus Medical Inc and Why is the Stock Rising?
Globus Medical was founded in 2003 as a spinal implant manufacturer offering a complete suite of spinal products. In fact, the Globus Medical has released over 100 products and have over 30 more products in various stages of development plus the company is conducting several FDA-approved Investigational Device Exemption (IDE) clinical studies.
The company went public last August at $12 a share after it lowered its target price to a range of $12 to $13 and sold 8.3 million shares to raise $100 million. Globus Medical had previously estimated its IPO would be for 11.8 million shares at a price of between $16 and $18.
At the time, Globus Medical pointed out that the spinal implant industry had attracted new competitors and that included established medical-device companies – putting pressure on prices. Moreover, investors should be aware that hospitals and other health-care providers buy such products and typically bill other payers, like insurance companies, and reimbursement rates could create pricing pressure in the future.
I am not seeing anything on the newswires to explain why Globus Medical has risen from the $13 level at the close of trading last Thursday to the $14.65 level at the end of the day on Monday. Nevertheless, the reason investors might want to continue paying attention to this small cap this week is the fact that Richard Baron, its Senior Vice President and Chief Financial Officer, will be presenting at the Leerink Swann Global Healthcare Conference in New York on Wednesday at 2:30 pm ET and there will no doubt be many institutional investors present.
What About Medical Device Peers NuVasive and Alphatec Holdings?
As for small cap peers, investors might want to check out NuVasive as its a medical device company focused on developing minimally disruptive surgical products and procedures for the spine with a marketed product portfolio focused on applications for spine fusion surgery. NuVasive has a market cap of $738.23 million plus the stock is up 8.6% over the past year and down 55.5% over the past five years.
Meanwhile, Alphatec Holdings manufactures and markets spinal implants and surgical instruments. Alphatec Holdings also rose 3.21% on Monday for a market cap of $146.17 million but the stock is down 18.7% over the past year and down 72.6% over the past five years.
The Bottom Line. Investors who are traders might want to keep an eye on small cap medical device stock Globus Medical this week while investors with a long-term time horizon might want to compare the stock to other peers in the spinal implant market like NuVasive and Alphatec Holdings.
John Udovich is a paid contributor of the SmallCap Network. John Udovich's personal holdings should be disclosed above. You can also view SmallCap Network's complete disclaimer and disclosure.
Do NOT buy or sell ATEC or GMED until you have read everything.
SmallCap Network provides comprehensive research and opinions on ATEC and GMED. |
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| Date: | May 24, 2013 | |
| Price: | Free | |
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