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Shares of Santa Clara, Calif.-based biomedical company Affymetrix Inc. (AFFX - Analyst Report) reached new 52-week high of $8.84 in mid-day trading last Friday. Shares of the company closed at $8.73 on the same day, representing a whopping one-year return of 164.5%.

AFFX has a market cap of $627.8 million. Average volume of shares traded over the last three months stood at approximately 1,071.3K.

Shares of Affymetrix started escalating following its promising third quarter results on Oct 30. The company posted adjusted earnings per share of 5 cents in the third quarter of 2013, surpassing the Zacks Consensus Estimate of 2 cents and rebounding from the year-ago adjusted loss of 3 cents.

Revenues inched up 0.9% to $80.4 million, beating the Zacks Consensus Estimate of $79 million. Product revenues improved 2.9% to $74.8 million, while Service and other revenues dropped 18.8% to $5.6 million in the reported quarter.

Gross margin surged 300 basis points (bps) to 55% from 52% in the third quarter of 2012. However, on an adjusted basis, gross margin increased 100 bps to 61%.

We believe that AFFX is ready for a turn around and the worst days are over for the company. In the face of declining demand for Affymetrix’ flagship GeneChip Expression products, management strategy to transform AFFX into a company with a broad reach in the high-growth markets for translational medicine, molecular diagnostics and applied markets is indeed encouraging.

Currently, AFFX retains a Zacks Rank #2 (Buy). Other better-ranked stocks in the biomed/gene gene industry include Heska Corporation (HSKA - Snapshot Report), InSite Vision Incorporated (INSV), and Vanda Pharmaceuticals, Inc. . All of them carry a Zacks Rank #1 (Strong Buy).

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