U.S.-based Illumina Inc. (NASDAQ:ILMN) is one of the biggest medical diagnostic companies in the world. ILMN has had an excellent run over the past five years, returning more than 150%. In this period, ILMN has seen significant growth in its revenue.
ILMN’s performance in the last six months though has been disappointing. In the last six months, the company’s shares have dropped almost 22% amid a selloff in the broad biotechnology sector. ILMN has also come under pressure due to growth worries.
For 2016, analysts project sales of $2.56 billion for ILMN. Based on the 2016 consensus sales forecast, ILMN trades at roughly 10x sales.
Despite the sharp pullback, ILMN looks fairly valued at current levels. Cancer Genetics Inc. (NASDAQ:CGIX), another major player in the diagnostics space, is expected to see significant sales growth in 2016. The consensus sales forecast for 2016 is $36.67 million. Based on this forecast, CGIX trades at just under 1x sales. When compared to ILMN, CGIX looks significantly undervalued.
CGIX though is not the only attractively valued company in the medical diagnostics space.
Vancouver-based LED Medical Diagnostics Inc. (TSX-Venture:LMD) is attractively valued when compared to the bigger players in the medical diagnostics space.
LED Medical Diagnostics provides dentists and oral health specialists with advanced diagnostic imaging products and software in addition to the award-winning VELscope tissue fluorescence visualization technology. VELscope Vx handheld adjunctive device enables a wide variety of oral abnormalities to be discovered, often before they become apparent to the unassisted eyes.
VELscope is the only tissue fluorescence device with photo/video documentation capabilities through the viewing mechanism, a key function for referrals and patient records.
This morning, LED Medical announced that the results of a study, titled "Fluorescence Visualization-Guided Surgery for Early-Stage Oral Cancer" have been published in the Journal of the American Medical Association- Otolaryngology - Head and Neck Surgery.
The study reported in the publication showed a significant reduction in the rate of local recurrence of early-stage squamous cell carcinoma and high-grade precancerous lesions in patients where VELscope tissue fluorescence visualization was used to assist in determining the surgical margin for excision, compared to those patients where conventional methods were used.
Dr. David Gane, CEO of LED Medical Diagnostics, said that the results of this important clinical study will be of great interest to oral cancer patients and practitioners alike.
Shares of LMD are up slightly on the news however have been in a medium-term downtrend and are currently close to their 52-week lows as good valuations and strong news are not encouraging investors to enter the stock at this time.
