2-Star Stocks Poised to Plunge: Volcano?
Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, medical device maker Volcano (NAS: VOLC) has received a distressing two-star ranking.
With that in mind, let's take a closer look at Volcano's business and see what CAPS investors are saying about the stock right now.
Volcanofacts
Headquarters (founded) | San Diego (2000) |
Market Cap | $1.5 billion |
Industry | Healthcare equipment |
Trailing-12-Month Revenue | $343.5 million |
Management | CEO Scott Huennekens (since 2002) |
Return on Equity (average, past 3 years) | 0.5% |
Cash/Debt | $219.3 million / $95.8 million |
Competitors | Boston Scientific |
Sources: S&P Capital IQ and Motley Fool CAPS.
On CAPS, 12% of the 191 members who have rated Volcano believe the stock will underperform the S&P 500 going forward.
Just last month, one of those Fools, kurtdabear, succinctly summed up the bear case for our community:
[Volcano] positively shouts "Short" (which I see already applies to nearly 10% of its float). ... [A]stronomical PE, negative free-cash flow, etc. On top of that, it's a medical device company with no doctors among top officers; and it's quite a young company with relatively low management ownership and a very high institutional ownership share. Taken altogether, it looks like about $6/sh. might currently be a reasonable price, and if it has a couple really lousy quarters in a row and the institutional investors start tiptoeing out of it, that's probably about where the price will settle.
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At the time thisarticle was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of Volcano. The Fool owns shares of St. Jude. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.
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