Bruker BioSciences: Earnings Growing, Insiders Buying
by H.S. Ayoub
BioHealth Investor.com
Bruker BioSciences (BRKR) seems primed for a great performance in 2007.
The maker of mass spectrometry and x-ray detection systems for both the life science and security industries continues its strong earnings growth over the last couple of years. This is not surprising, as both industries continue to see strong growth world wide, and Bruker is more than happy to provide the necessary tools.
Bruker is the parent of the following divisions:
On February 22nd, the company announced an increase of 80% in net income per diluted share for 2006 over the prior year, and expects earnings growth of 40% for 2007. This is the type of growth that drives small caps to mid-cap status.
As of Wednesday, March 7th, the company had a market cap of less than $1 billion, with a little over $50 million in cash and an operational cash flow of more than $40 million during 2006. The relatively low level of cash on hand is primarily due to recent acquisitions.
Revenue has seen a tremendous surge as well. For each of the last four years revenue has increased, going from $260.679 million in 2003 to $435.800 million in 2006. But the largest jump was just last year, as revenue jumped from just less than $297.569 million in 2005 to $435.8 million in 2006. No doubt, the recent acquisitions have helped in that revenue jump as company CEO Frank Laukien explains, "The acquisition of Bruker Optics, as well as the other important acquisitions we completed over the past 15 months, continued to strengthen both our traditional research systems business and our newer industrial and applied analysis business".
What really makes this stock attractive is how closely it is held. According to Yahoo!Finance, insiders hold about 57% of outstanding shares, and institutions hold
close to 34%. This leaves a relatively short supply of shares available on the open market!
The company's CEO, Mr.Laukien, continues his buying frenzy with the purchase of about $1 million worth of company stock over the last couple of weeks in a price range of $8.69 to $9.30. The stock closed trading on Wednesday at $9.42 a share.
While Bruker stock has been on a tear over the last couple of years, it seems that with the continued surge in growth and the tight hold Mr.Laukien has on his shares, the stock should still continue to perform well in 2007.
There is one point to keep in mind however; with such a high percentage of shares held by institutions coupled with a relatively risky small cap, investors must be careful as one earnings miss could send the price of the stock plummeting as fund managers would follow each other and jump over the cliff. This could be exaggerated even more so with an expected downturn in the market.
An investor in Bruker is betting on continued strong growth, and with high insider buying activity recently it seems that the risk is marginalized.
Disclosure: Author does not currently hold any position in Bruker BioSciences stock.
Source: BioHealth Investor.com
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BioHealth Investor.com
Bruker BioSciences (BRKR) seems primed for a great performance in 2007. The maker of mass spectrometry and x-ray detection systems for both the life science and security industries continues its strong earnings growth over the last couple of years. This is not surprising, as both industries continue to see strong growth world wide, and Bruker is more than happy to provide the necessary tools.
Bruker is the parent of the following divisions:
Bruker AXS
Developer and provider of life science, materials research and industrial X-ray analysis.
Bruker Optics
Developer, manufacturer and provider of research, analytical and process analysis instruments and solutions based on infrared and Raman molecular spectroscopy technology.
Bruker Daltonics
Developer and provider of innovative life science tools based on mass spectrometry, and also offers a broad line of chemical, biological, radiological and nuclear (CBRN) detection products for homeland security.
On February 22nd, the company announced an increase of 80% in net income per diluted share for 2006 over the prior year, and expects earnings growth of 40% for 2007. This is the type of growth that drives small caps to mid-cap status.
As of Wednesday, March 7th, the company had a market cap of less than $1 billion, with a little over $50 million in cash and an operational cash flow of more than $40 million during 2006. The relatively low level of cash on hand is primarily due to recent acquisitions.
Revenue has seen a tremendous surge as well. For each of the last four years revenue has increased, going from $260.679 million in 2003 to $435.800 million in 2006. But the largest jump was just last year, as revenue jumped from just less than $297.569 million in 2005 to $435.8 million in 2006. No doubt, the recent acquisitions have helped in that revenue jump as company CEO Frank Laukien explains, "The acquisition of Bruker Optics, as well as the other important acquisitions we completed over the past 15 months, continued to strengthen both our traditional research systems business and our newer industrial and applied analysis business".
What really makes this stock attractive is how closely it is held. According to Yahoo!Finance, insiders hold about 57% of outstanding shares, and institutions hold
close to 34%. This leaves a relatively short supply of shares available on the open market! The company's CEO, Mr.Laukien, continues his buying frenzy with the purchase of about $1 million worth of company stock over the last couple of weeks in a price range of $8.69 to $9.30. The stock closed trading on Wednesday at $9.42 a share.
While Bruker stock has been on a tear over the last couple of years, it seems that with the continued surge in growth and the tight hold Mr.Laukien has on his shares, the stock should still continue to perform well in 2007.
There is one point to keep in mind however; with such a high percentage of shares held by institutions coupled with a relatively risky small cap, investors must be careful as one earnings miss could send the price of the stock plummeting as fund managers would follow each other and jump over the cliff. This could be exaggerated even more so with an expected downturn in the market.
An investor in Bruker is betting on continued strong growth, and with high insider buying activity recently it seems that the risk is marginalized.
Disclosure: Author does not currently hold any position in Bruker BioSciences stock.
Source: BioHealth Investor.com
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posted by Nico at
9:04 PM
2 Comments:
Do you think this company has a sustainable competitive advantage?
It is difficult to answer that question without looking at Bruker's market penetration numvers over the last few years.
Time will tell, but at its current high sales growth rate, Bruker should have an advantage stemming from momentum alone.
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