High Ranking Medical Company Setting Up!
Thursday, February 28, 2008 - CANSLIM.net

 

Meridian Bioscience Inc.

 

Ticker Symbol: VIVO (NASDAQ)

Industry Group: Medical- Products

Shares Outstanding:  39,900,000

Price: $34.95 2:00PM ET

Day's Volume: 201,311 2/28/2008 2:00PM ET

Shares in Float:  37,900,000

52 Week High: $36.09 1/11/2008

50-Day Average Volume: 382,830

Up/Down Volume Ratio: 1.4

Pivot Point: $36.19 1/11/2008 plus 10 cents

Pivot Point +5% = Max Buy Price: $38.00

Web Address: http://www.meridianbioscience.com

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CANSLIM.net Profile: Meridian Bioscience, Inc., a life science company, engages in the development, manufacture, sale, and distribution of diagnostic test kits primarily for respiratory, gastrointestinal, viral, and parasitic infectious diseases. The immunodiagnostic technologies used in its diagnostic test kits include enzyme immunoassay, immunofluorescence, particle agglutination/aggregation, immunodiffusion, complement fixation, and chemical stains used by reference laboratories, hospitals, and physicians' offices. The company was founded in 1976 and is based in Cincinnati, Ohio. VIVO hails from the Medical-products group which is presently ranked 24th on the 197 Industry Groups list, which easily satisfies the L criteria. There were 99 top-rated funds with an ownership interest in March '07, yet that number jumped to 136 as of December 07, offering a very strong sign of increasing institutional interest (I criteria). Also, the stock has less than 40 million shares in the float, and having a small supply of shares is a characteristic that most of the greatest stock market winners exhibited before they enjoyed explosive moves up.  Its annual earnings growth history has been steady but not especially strong, and quarterly earnings increases in the 4 latest quarterly earnings comparisons were borderline with the +25% guideline.  However, sales revenues increases have been a little shy of the guidelines, and stronger sales and earnings increases are always preferred.  Return On Equity stands at +23%, which is above the +17% guideline.

What to Look For and What to Look Out For: Look for the stock to confirm a new technical buy signal by breaking out and closing above its $36.19 pivot point with gains on heavy volume in the coming days and weeks. Remember that buyable breakouts require three important components: the stock must clear its pivot point with considerable gains, those gains must be backed by at least +50% above average volume, and the overall market environment must improve and produce a new batch of leadership.   As always, it is of the utmost importance to sell a stock if it drops 7-8% below your purchase price. The small supply of outstanding shares could lead to dramatic price volatility, especially if the institutional crowd rushes in or out. Also, the market conditions are still somewhat questionable, largely due to the lack of leadership, which suggests this is not an ideal environment conducive for accumulating shares. This high-ranked leader should remain on an active watchlist and could be considered as a new buy candidate in the event it closes above its pivot point on the necessary volume needed to trigger a technical buy signal.

Technical Analysis:  VIVO is currently forming the right side of its base. The stock is now trading very near its pivot point on very healthy volume patterns. At this point, there has been virtually no sign of institutional selling (distribution) which is a healthy sign. Remember that it is imperative to see volume surpass the necessary threshold needed to trigger a technical buy signal as the stock trades and closes above its pivot point. Until then, this high ranked stock should remain on an active watchlist.


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