STOCK of the WEEK - JANUARY 18, 2005
Biolase Technology (nasdaq: BLTI)
Biolase Technology (nasdaq: BLTI)
Joseph Parnes, editor of Shortex, recommends buying shares of Biolase Technology (BLTI). The San Clemente, Calif. medical technology company designs, manufactures, and markets surgical laser products used in dental procedures. For the nine months ended September 30, 2004, revenues grew 25% over the same period in 2003 to $41.4 million. Net income, however, dropped by 97% to $155,000 due to higher selling, general and administrative expenses. Biolase share are down 47.9% over the past 12 months, but have rebounded 79% from their October 25 low of $5.91 per share. Based on Friday's close of $10.58, BLTI trades for 55 times expected 2005 earnings of $0.19 per share, 4.4 times past 12 months of sales, and 4.05 times book value. Biolase has a market capitalization of $240 million and pays an annual dividend of $0.03 per share for a yield of 0.28%.
Parnes advises buying BLTI now because of some recent positive developments. In mid-December, the company was granted a new U.S. patent protecting key areas related to its laser pulse technology. Also, on December 20, Biolase acquired the intellectual property of Diodem, LLC, which stops Diodem's action of patent infringement against Biolase. In addition, says Parnes: "Previously deferred orders due to the cancelling of dental seminars in New Orleans from last fall's hurricanes are being recouped and the company is on the road to achieve sales growth of 50% plus in three years." BLTI's Waterlase system uses a patented combination of water and lasers to precisely cut hard tissues (bone and teeth) and soft tissue (gums) with minimal damage to surrounding areas. Its LaserSmile system uses a laser to perform soft tissue and cosmetic procedures, including teeth whitening. Parnes says both product lines are in strong demand by dental professionals
