CardioNet Shares Rise On Leerink Analyst Upgrade
NEW YORK (AP) ¿ Shares of CardioNet Inc. gained ground Wednesday after a Leerink Swann Research analyst upgraded the stock, citing an "encouraging" outlook for the wireless heart-monitoring device maker.
Leerink analyst Rick Wise upgraded the stock to "outperform" from "market perform" while touting the company's potential for volume growth in the heart-monitoring device market, along with a restructuring move.
The stock rose 20 cents, or 3.3 percent, to $6.20 in afternoon trading. Shares have traded between $4.22 and $29.50 over the last 52 weeks.
"Now with a clear and detailed restructuring plan in place and still-strong volume growth ahead, we are more inclined to think that CardioNet is on track to deliver an improving outlook with potential for upside in 2010 and beyond," Wise said in a note to investors.In November, the Conshohocken, Pa.-based company reported a third-quarter loss partly on higher marketing spending following a cut in Medicare reimbursement rates. Specifically, reimbursement rates were cut on mobile heart technology, which includes CardioNet devices. The company now expects up to 40 percent volume growth in 2010 for its mobile cardiac outpatient telemetry device. CardioNet has also hired an investment bank to assess strategic alternatives, Wise said. Salesforce improvements and new uses for devices such as SomNet for the detection of obstructive sleep apnea have helped year-to-date volume growth, he added. While Wise still expects reimbursement rate cuts over the next two years, he said the company has been working with the government to secure national pricing for its cardiac outpatient telemetry device. Other positive developments for the company include a reorganization of the reimbursement services department, a new automated billing system, and outsourcing of the company's oldest receivables to a collections firm, Wise said. He set a new stock value range of $8 to $10, up from $7.
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