One Guy's Investments

The story of Travis Johnson's investment portfolio, with analysis and thoughts on the stocks and funds I've considered, bought and sold. I don't claim to have brilliant picks that will make you money, and I'm not an investment advisor, registered or otherwise, so don't follow my moves unless you're happy to lose money without suing someone. I'm just one guy. My articles get republished in several places, but always appear here first -- subscribe now(totally free via RSS) to see them before they're on Yahoo Finance.

Friday, December 23, 2005 -- Subscribe free

Annual Checkup -- CCEL

I opened my initial position in Cryo-Cell International (CCEL -- click to register for free RT streaming quote) back in mid-November at $3.89, so my shares are a bit depressed at the moment. My full rationale for investing in this private cord-blood stem cell bank is in my recent writeups here and here, but I think 2006 could end up being a very big year for this investment. All of CCEL's competitors have seen a very recent boost in price due to the new Stem Cell Therapeutic and Research Act signed by the President earlier this week that appropriates $300 million for research and infrastructure for umbilical cord stem cells, but CCEL didn't see nearly the same appreciation as most of them. CCEL has the most modern banking facility and one of the largest, if not the largest, client base, and should benefit from the higher profile of stem cell banking as well as the increased awareness of the amazing things that stem cells may possibly be able to do (cure diabetes, etc.) -- even if they don't actually receive any direct governmental funding, which is certainly possible as well. CCEL is launching a new service in 2006 that will further differentiate their offerings -- they will begin banking placental stem cells as well, using a patented and exclusively licensed process, which should help them stand out for expectant parents. Finally, 2006 marks the year that CCEL aims to finish its financial turnaround and re-list on one of the major exchanges, which may boost the shares as well. With the price a bit low here, I'll definitely consider filling out my position early in the year.

Labels: CCEL

This article posted by One Guy @ 12/23/2005 09:35:00 AM 3 comments

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Comments:

Any insight into the quality of management at CCEL?

Permanent Link posted by

Anonymous : 12:14 PM

That's probably the best question you could ask of Cryo-Cell. Their Chairman and CEO, Mercedes Walton, has been a director since 2000 and thus was certainly a part of the implosion at the company that hit a head in 2003. She took over as Chairman as the company was in some stress due to the resignation of the founder and then, in 2003 as the company unraveled, she took over as CEO when the CEO abruptly quit.

That said, from all I read she has been the core driver of the revamping of CCEL's strategy -- she was there when they dumped their silly mechanized bank system and signed on for what is now the highest quality cord-blood bank facility in the country (or at, least, the only one that meets both ISO 9000 and blood bank standards). She was there when the company fell from grace and, I hope, that will help as they return to prominence. With such a small company you really need to rely on your own assessment, though -- check out my longer posts and follow the links to listen to her presentations at some conferences. I'm comfortable that she is in the midst of engineering a very solid turnaround, but I could just be getting bamboozled :)

Permanent Link posted by

One Guy : 1:08 PM

Any comments on their pricing structure of their service? The numbers don't seem to add up to me. They returned $9M gross profit on $13+change M. I've been puzzling over how they could do this when they charge $1600k for processing and storing (previous a couple of hundred dollars less). I would have thought that the screening for infectious disease and preparing the cells for freezing might cost that much. Do they just ry to break even on the processing to make money on storage? I've just started to look into this one, but I am a bit confused.

Permanent Link posted by

Anonymous : 12:58 PM