Share price of CardioNet Inc. (BEAT - Free Report) , has been on the rise since this provider of ambulatory, continuous, real-time outpatient management solutions inked a three-year deal with UnitedHealthcare Insurance Company, a wing of UnitedHealth Group (UNH - Free Report) . Following the announcement, price of the stock shot up 55.45% (or $1.48) on Tuesday. The closing price of this medical technology stock of $4.99 represents an attractive year-to-date return of $127.85%.
On Jun 10, CardioNet gained coverage for its line of cardiac monitoring solutions. As per the National Provider Agreement effective Jul 1, 2013, UnitedHealthcare will cover CardioNet’s entire portfolio of monitoring modalities, encompassing the company’s well regarded Mobile Cardiac Outpatient Telemetry (MCOT) solution. Further, the agreement applies to all affiliated entities of UnitedHealthcare, encompassing Medicare and managed Medicaid plans.
CardioNet won coverage for its MCOT offering on the back of superior clinical data. Further, the application of MCOT is extendable to several indications.
This new deal that expands coverage for CardioNet appears to be lucrative as UnitedHealthcare presently covers over 70 million Americans. The agreement will ensure a substantial increase in the market which the company will serve with the inclusion of UnitedHealthcare’s nationwide network.
The deal with UnitedHealthcare triggered the bullish momentum for CardioNet as reflected in the 52-week high of $5.30 on Tuesday. We believe that the expanded coverage for its product platform should foster growth for the company.
Earlier, in April, CardioNet announced a structural change to support long-term growth. Management disclosed its plan to adopt a holding company structure and realign its adjacent business to leverage its growth profile. We look forward to these developments with full optimism.
Stocks to Consider
Medical stocks such as Haemonetics Corporation (HAE - Free Report) , carrying a Zacks Rank #1 (Strong Buy) is worth considering. ArthroCare Corporation , carrying a Zacks Rank #2 (Buy) also warrants a look.