Price Drop:
MAKO and NXTM shares plunged today more than 6% and 12%, respectively. Despite the fact that both companies have been increasing revenue wildly, the market was upset that earnings were not higher.
Long Term vs. Short Term
Short term investors freak out when companies do not meet earnings expectations, long term investors look at the bigger picture. In the case of MAKO and NXTM, at this early stage of the game, revenue growth is far more important than earnings growth. As investors, we are most concerned about whether or not MAKO's and NXTM's products are being accepted into the medical community.
If you are new to Caligiuri Investments or need a refresher on MAKO, please click here.
Recommendation of NXTM:
Nxstage Medical has the patent for a home dialysis machine. Currently, patients must go to the hospital to receive their dialysis treatment, so NXTM provides a much more convenient treatment solution. In addition, NXTM's dialysis machine has been accepted into the medical community and has experienced tremendous growth in sales. If NXTM continues to penetrate the dialysis patient market, as I expect it will, investors will rake in the profits.
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