Cryo-Cell -- investing for the future (CCEL)
I've been a shareholder in Cryo-Cell (CCEL -- click to register for free RT streaming quote) for a relatively brief time -- I first bought shares and posted my argument for doing so back in November. Success has so far not come my way on this one, but that's not very surprising.
CCEL is an over the counter stock, not yet returned to the national markets -- though they hope to apply for relisting this year if possible (their share price has to maintain $4 for a while before they qualify).
But today I'm thinking about them a bit because they just released their earnings, for the oddly timed fiscal year that ended in November. The stock has tumbled slightly, though the news wasn't particularly bad.
Cryo-Cell is an investment in the future -- both for customers and for investors.
If you decide to bank your child's umbilical cord blood privately, you're effectively taking out an insurance policy and hoping that if your child or a family member does get a horrible disease, stem cells from that cord blood might be an effective treatment. So far, a large number of parents are opting to use this service -- though it's still a tiny minority of the total births in the US. But if you can afford it and believe that stem cells will ultimately become much more useful in the treatment of heart disease, cancer or diabetes, it seems a reasonable bet for those who can afford it.
For investors, we're betting that stem cell research will continue to illuminate new uses for these incredible little cells. The tease that placental stem cells may cure diabetes in mice, or the few examples of stem cells treating leukemia in siblings, or similar stories all have us wondering when this research will become mainstream enough that cord blood banking will be a recommendation of every obstetrician.
Cryo-Cell had a fine year but not a great one, largely because their expenses increased pretty dramatically -- they have rolled out more selling expenses, as well as incurring some significant expenses for their new facilty and accreditations. I'll be watching to see if they can keep their costs in control as they grow customers, because the near 20% revenue growth certainly makes for a solid top line.
But this company is an interesting beast, with three things that stand out for me as important reasons why I've invested in them ... and this also stands as a list of three things I'm trying to watch closely for this company:
CCEL is an over the counter stock, not yet returned to the national markets -- though they hope to apply for relisting this year if possible (their share price has to maintain $4 for a while before they qualify).
But today I'm thinking about them a bit because they just released their earnings, for the oddly timed fiscal year that ended in November. The stock has tumbled slightly, though the news wasn't particularly bad.
Cryo-Cell is an investment in the future -- both for customers and for investors.
If you decide to bank your child's umbilical cord blood privately, you're effectively taking out an insurance policy and hoping that if your child or a family member does get a horrible disease, stem cells from that cord blood might be an effective treatment. So far, a large number of parents are opting to use this service -- though it's still a tiny minority of the total births in the US. But if you can afford it and believe that stem cells will ultimately become much more useful in the treatment of heart disease, cancer or diabetes, it seems a reasonable bet for those who can afford it.
For investors, we're betting that stem cell research will continue to illuminate new uses for these incredible little cells. The tease that placental stem cells may cure diabetes in mice, or the few examples of stem cells treating leukemia in siblings, or similar stories all have us wondering when this research will become mainstream enough that cord blood banking will be a recommendation of every obstetrician.
Cryo-Cell had a fine year but not a great one, largely because their expenses increased pretty dramatically -- they have rolled out more selling expenses, as well as incurring some significant expenses for their new facilty and accreditations. I'll be watching to see if they can keep their costs in control as they grow customers, because the near 20% revenue growth certainly makes for a solid top line.
But this company is an interesting beast, with three things that stand out for me as important reasons why I've invested in them ... and this also stands as a list of three things I'm trying to watch closely for this company:
- Unlike some of its competitors like Viacord, CCEL doesn't do stem cell research, which helps to keep the volatility down (no clinical trials to worry about) ... if their service continues to grow, the recurring revenue stream from annual storage fees could become a single good enough reason to own this company.
- CCEL will be the only private bank in the US to offer harvesting and storage of Plureon placental stem cells when they roll out that service offering sometime this year. This is a bit of a gamble since those cells are even further along than umbilical cord cells in the path to general acceptance ... but overall, I like this because it differentiates their service.
- And CCEL may have a purely stock-related catalyst this year, in that the company's turnaround appears to be well underway and some continued solid financial performance should enable them to be relisted on a major exchange, re-entering the mainstream investing universe.
This article posted by One Guy @ 3/01/2006 03:23:00 PM 0 comments
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