CHDX is a stock that is on the top of my watchlist for tomorrow. I like this stock for many reasons and think it offers excellent upside and low risk from Wednesday’s close. The big catalyst that I think should drive CHDX tomorrow is Intuitive Surgical (ISRG) earnings after the bell which beat analysts estimates by $.37 driven by much higher sales of the companies surgical robots. ISRG was trading up more than 20% or $20 from the $169.79 close after hours off of the report.
CHDX sells medical products manufactured by various major multinational companies, including Siemens AG and Intuitive Surgical, for which the Company is the exclusive distribution partner for the sale and servicing of color ultrasound systems and surgical robotic systems respectively.
In June Chindex surged over 30% off earnings of $3.4 million, or 22 cents per share, in the three months ending March 31. The company had lost $2.7 million, or 20 cents per share, last year. Revenue jumped 72 percent, to $59.7 million from $34.6 million as product sales more than doubled.
Medical-products revenue rose to $39.5 million from $17.5 million due to gains from government-backed loan programs, increased inpatient and outpatient revenues from its hospital unit, and greater sales of devices like the da Vinci robotic-surgery system (ISRG’s flagship invention). For the fiscal year, Chindex’s profit grew 36 percent, to $5 million, or 31 cents per share, from $3.7 million, or 27 cents per share. Sales grew 32 percent, to $171.4 million from $130 million.
Since earnings, CHDX has consolidated gains nicely from a technical prospective. Today it hammered off the morning dip to hold its 20 day and 9 day moving averages. I have kept a close eye on the stock over the last couple days in anticipation of a day trade as China related stocks with good earnings reports have been very hot over the last couple days but the stock hasn’t had much of a catalyst and has seemed to be waiting on the ISRG earnings. I expect CHDX to play catch up to the other hot China stocks over the next couple days as investors turn to emerging markets in search of growth stocks. I will be looking to pick up shares at this level and would be adding aggresively should it break $13 on big volume as that would be a clear trendline break. I will be cutting shares if it broke today’s low at around $11.50. I am looking for a multi-day runner here but I contiue to remain cautious as the overall market continues to be overobought in the short term off a powerful string of earnings driven move. Keep in mind, CHDX is very thinly traded so be sure to keep position size in check. The stock looks considerable inticing on a weekly chart, which is often the best indicator to use on thinly traded stocks.
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Since I have arrived at ColmsUm.com I have been a bit tenative to post a slew of stock ideas without fully laying out my trading style and a framework for each of the readers here to develop there own style and integrate my ideas within. Every trader/investor has different backgrounds, time frames, capital restraints etc., etc. and each trader must develop a system or style that consistently provides the best returns given those restraints in order to be successful. At first I was going to just post some reference material but instead I am continuing to work on a much larger undertaking that will provide a much more comprehensive guide to developing a successful style with detailed explanations of managing risk and identifying technical patterns that suit different styles, to name a few things. So look forward to a work in progress edition which I hope to get out as soon as possible.
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