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Why BioTelemetry (BEAT) Is Soaring Today

NEW YORK (TheStreet) -- BioTelemetry  (BEAT) was soaring 27.16% to $9.27 on Monday after the wireless medical technology company announced it had won a patent infringement case against Mednet Healthcare Technologies. 

Mednet entered into a consent judgment to state that it and its subsidiaries, Heart-Care Corporation of America, Universal Medical, and Universal Medical Laboratory, infringed on five patents that BioTelemetry and its subsidiary, Braemar Manufacturing, owned and that all five patents are valid. The case, which was filed in U.S. District Court for the Eastern District of Pennsylvania in May 2012, revolved around patent technology used in BioTelemetry's Mobile Cardiac Outpatient Telemetry, or MCOT.

After the consent judgment entry, BioTelemetry acquired all outstanding shares of Mednet for approximately $16 million, which consisted of $5.5 million in cash, $800,000 worth of BioTelemetry common stock and the assumption of $9.7 million in debt.

TheStreet Ratings team rates BIOTELEMETRY INC as a "sell" with a ratings score of D. TheStreet Ratings Team has this to say about its recommendation:

"We rate BIOTELEMETRY INC (BEAT) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. Among the areas we feel are negative, one of the most important has been weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Net operating cash flow has significantly decreased to $2.88 million or 61.46% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Health Care Providers & Services industry and the overall market, BIOTELEMETRY INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The net income growth from the same quarter one year ago has exceeded that of the Health Care Providers & Services industry average, but is less than that of the S&P 500. The net income increased by 5.3% when compared to the same quarter one year prior, going from -$3.12 million to -$2.96 million.
  • The gross profit margin for BIOTELEMETRY INC is currently very high, coming in at 72.05%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -9.27% is in-line with the industry average.
  • BIOTELEMETRY INC reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, BIOTELEMETRY INC continued to lose money by earning -$0.48 versus -$2.50 in the prior year. This year, the market expects an improvement in earnings (-$0.33 versus -$0.48).
  • You can view the full analysis from the report here: BEAT Ratings Report

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