Keeping Up With BEAT and USAT
No one wants to go anywhere anymore if they don’t have to. Not to the hospital to get hooked up to a heart monitor, and certainly not to sundry vending machine locations to collect the coins and the bills.
That’s the broad theme driving two of smaller-cap stocks in the Breakthrough Tech Profits portfolio.
Biotelemetry (BEAT) provides remote cardiac monitoring services and equipment that help keep people out of hospitals, sparing them hospitalization’s risks and costs. Last week it completed the acquisition of rival LifeWatch AG, gaining additional heft in remote medical monitoring.
Revenue was up 15% year-over-year last quarter, mostly as a result of recent acquisitions. The share price has tripled in 15 months and notched its most recent record high on Wednesday. That hasn’t stopped one analyst from raising the price target to $44 in the wake of the LifeWatch acquisition, and it’s not going stop up from hiking ours. Buy BEAT below $37.
USA Technology (USAT) allows owners of vending machines to stop collecting, counting and depositing quarters and dollars. It sells, leases and rents credit and debit card processors linked to a proprietary payments platform. Growth has been strong: the company preannounced fourth quarter revenue growth of 46-55%, aided by a big order from a large customer.
The disclosure was made ahead of a secondary offering of 8.3 million shares amounting to roughly 20% of the shares previously outstanding. The deal priced at $4.50, but the share price has since rallied well above $5.
The share price is up 38% in four months but still 7% below the record high set last September. We’ll give it a chance to get there before re-evaluating. As noted Monday, selling something just because it’s up a lot tends to detract from long-term returns. Buy USAT below $5.40.