Furthermore, the combination has enabled Cynosure to offer the full range of hair removal modalities: two offered by Cynosure and one by Palomar. The laser device offered by Palomar is currently the fastest system in the market, providing the company with first mover advantage which now Cynosure will also be able to enjoy.
Cynosure, Inc. (NASDAQ:CYNO) introduced the first picoseconds technology for tattoo removal in March, 2013 with much more improved results compared to the technology that existed in the market. This can also benefit Palomar.
Cynosure is the pioneer in home use over the counter device for treatment of facial wrinkles. It has been approved by FDA. The company expects launch it commercially through Unilever in 2013. The product provides a low cost platform for additional customer applications. This innovative product is likely to increase Cynosure’s market presence.
Cynosure tends to pose an attractive buy opportunity for the investors, as exhibited its PEG ratio analysis, which is 0.20. Buying the company to achieve the benefits of its earnings growth rate is quite cheap for the investors as shown by its PEG ratio, which is lower than the standard 1.
Solta Medical Inc (NASDAQ:SLTM) recently announced to have been given the FDA 510k approval of its Fraxel DUAL 1550/1927 laser system for the treatment of pigmented lesions and use in dermatological procedures. Following the approval, the shares price of Solta saw a rise once again after a record low price in the prior month. However, the company remains to be a comparatively small player in the $35 billion plus global aesthetics market.
Final Thoughts
The two companies have a lot of potential for additional growth and continuous investment in research and development for innovative products provides for an even brighter future of the merged company as a whole. In my opinion, buying the shares of Cynosure will give a higher return in the form of price appreciation for an investor who can lock his investment for a few years as Cynosure, Inc. (NASDAQ:CYNO) does not have a history of paying dividends.
Despite being the market leader and rising revenues, Syneron had negative earnings and cash flow from operations. The company does not give out dividends and the price return has been 15% in the last year. The negative earnings trend is expected to continue as the company reported a negative EPS of $0.07 in first quarter EPS in FY13 compared to its (0.04) EPS for the full fiscal year FY12. Thus, this stock should be sold.
Solta Medical Inc (NASDAQ:SLTM) has been reporting a negative net income since quite a few years, due to its rising sales, general and administration expenses and other operating expenses. The company has a long way to go before it begins to report profits. Even incurring higher R&D will take some time in providing a positive healthy return to the investors. Thus, this stock should be sold.
The article Cynosure: The Rising Star of the Industry originally appeared on Fool.com and is written by Awais Iqbal.
Awais Iqbal has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Awais is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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