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Vascular Solutions (VASC)

This medical device company beat analysts’ estimates by two cents last quarter. The company will report earnings on Thursday, January 21st at 3:30pm CST, currently estimated at $0.27 per share.

Vascular Solutions (VASC)
From The Periscope Report

Our top stock pick for 2016 is Vascular Solutions (VASC), which makes catheters and guidewires that are used in vascular surgery. Over the last ten years, VASC has introduced 80 new products, which have made tremendous inroads against much larger competitors like Medtronic and Boston Scientific, which speaks to the quality of VASC products.

An exciting new product, freeze-dried plasma, will hit the market in 2019, which could easily double the size of the company. VASC is making rapid progress with its RePlas collaboration with the U.S. Army. Freeze-dried plasma has been unavailable in the U.S. since 1968. As a result, the U.S. military is able to acquire only very limited quantities of freeze-dried plasma from France and Germany, outside the FDA regulatory system and sufficient for treating only a very small percentage of U.S. troops in combat. Because of the unique clinical need for freeze-dried plasma for wounded soldiers, as well as to save lives in the civilian first responder market, VASC has elevated the priority of RePlas and will keep it is a top priority R&D project. The U.S. Army also elevated RePlas in 2015 to ‘high priority’ status.

VASC introduced nine new products in 2015, and it has a deep pipeline of more than 40 new medical device projects in various states of development for launches scheduled starting in 2016.

CFO James Hennen thinks he can push the operating margin up to 25% - 27% within three years as sales approach $200 million. Strong cash flows and a strong balance sheet allow VASC to fully fund all R&D initiatives, and at the same time, take advantage of any opportunities for distribution agreements and tuck-in acquisitions. For the first nine months of 2015, Cash Flow from Operations increased to $15.2 million, up from $14.3 million a year ago. We think earnings will grow 20% in 2016 to $1.25 per share.

Tom Byrne, The Periscope Report, 4025 Sunset Ridge Drive, Canyon Ferry Crossing, Helena, MT 59602, 406-465-4663, January 5, 2016