Masimo Wins a Stevie for Pronto-7

Masimo Corporation (MASI - Analyst Report), a leader in non-invasive monitoring technology for patient care, recently revealed that its Pronto-7 offering has been awarded a GOLD Stevie American Business Award. The Pronto-7 received recognition for the best new service or product in the domain of Health and Pharmaceuticals. Since its launch in 2011, the acclaimed Pronto-7 has won four industry awards.

The Pronto-7 is a small device intended for hassle-free and not-invasive total hemoglobin monitoring in conjunction with perfusion index, SpO2 and pulse rate. The flyweight Pronto-7 provides reading of total hemoglobin in less than 60 seconds without causing the pain associated with needles.

The Stevie awards were conceived to build public appreciation of the achievements of corporate citizens around the globe. Its purpose is to create recognition of outstanding persons and entities in the business fraternity, the media and among the public.

Earlier, in the second quarter of 2012, Masimo completed the strategic acquisition of PHASEIN AB of Sweden. The purchase price was $30 million. PHASEIN is a provider of sidestream and mainstream capnography offerings. It had sales of about $10 million.

This acquisition provides the company with another set of measurable variables using its know-how. It is expected that earnings per share will be neutral in 2013 and subsequently turn accretive.

Masimo is a market leader in the pulse oximetry monitoring equipment industry. The company’s prospects are encouraging, given the sizeable global market opportunity, adoption of pulse oximetry in non-critical areas of the hospital and growing barriers to entry due to additional non-invasive parameters.

Shipments have been growing at a steady rate fueled by new contracts. However, the renewal of the royalty agreement with Covidien (COV - Analyst Report) provides little or no benefit due to lower rates. Further, competition is intense and Masimo partly depends upon its OEM partners for sales. Our Neutral recommendation is supported by a short-term Zacks #3 Rank (Hold).