Hot Penny Stocks – Chembio Diagnostics, Inc. (CEMI)

There has never been a demand for slow point-of-care (POC) testing devices. Quite to the contrary, there is a constant demand for ever increasing speed in the POC market. Whether you’re a physician administering an HIV test or a supplier of employee drug screening services, haste is a desirable quality.

Today’s company has built a reputation for developing POC testing devices that are on the cutting edge of speed and accuracy.

 

QUICK FACTS

Ticker                                     CEMI

Industry                                  Diagnostic Substances

Recent Price                          $4.84

Market Cap                            $38.8 m

Shares Outstanding               8 m

Average Volume                    14,826

Dividend Yield                        N/A

Website                                  http://chembio.com/

 

COMPANY DESCRIPTION

Chembio Diagnostic Systems, Inc. (CEMI) develops point-of-care diagnostic tests (POCTs) utilizing their patented DPP® platform. Their revenue is primarily derived from HIV and syphilis testing devices, which are sold globally. Chembio is ranked second in the U.S. rapid HIV testing market, with 25% of market share.

CEMI currently has two new Syphilis POCTs in the pipeline, and estimate they could satisfy the needs of a potential $75 million market. In addition to their HIV and syphilis tests, the company is also developing a DPP® Hepatitis-C POCTs.

 

FINANCIALS

CEMI’s most recent quarterly numbers were released on November 13, 2012.

The company reported revenue of $5 million in the quarter. Down from last year’s third quarter revenue of $5.9 million. This is a decrease of 15%. Chembio Diagnostics also reported a net loss of approximately $485,113… a year-over-year decrease from a net income of $475,605.

As of September 30, 2012, the company reported $3.3 million in cash and $95,000 of long-term debt.

 

 KEY METRICS ANALYSIS

Trailing P/E                                 6.8 x

Price / Sales                               1.6 x

Return on Assets                        6.2 %

Insider ownership                       25.1 %

Short Ratio                                  0 x

Current Ratio                              3.5 x

Total Debt To Equity                   1.1 x

 

RECENT EVENTS

On December 21, 2012, Chembio announced it received approval for the Dual Path Platform® (DPP®) HIV 1/2. The device detects antibodies to HIV-1 and HIV-2 with an oral and blood test, with visual results within 15 minutes. The device is simple, requires a small sample size and doesn’t need to be refrigerated.

In addition to the flexibility and ease of use, the DPP® HIV 1/2 is the only rapid testing device to earn approval for testing of patients younger than 13. 

 

MANAGEMENT TEAM

Lawrence A. Siebert – Chairman, President and CEO

Richard J. Larkin – CFO

Javan Esfandiari – Executive Vice President – Research and Development

Richard Bruce – Vice President – Operations

Michael Steele – Vice President – Sales, Marketing and Business Development

 

STOCK ANALYSIS

CEMI

 

 

 

 

 

 

 

Chart Courtesy of StockCharts.com

CEMI’s 52-week low was $3.36 and the 52-week high was $5.80. Right now the stock is trading at $4.84. The 50-day moving average is near $4.58 a share and the 200-day moving average is at $4.50. The company has a market cap of $38.8 million and 8 million shares outstanding.