Why AngioDynamics Shares Tumbled

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of AngioDynamics  -- which makes medical, surgical, and diagnostic devices in the vascular and oncology arena -- tumbled as much as 16% after reporting its preliminary third-quarter earnings results.

So what: Although these results are unaudited, they paint a pretty stark miss for AngioDynamics. For the quarter, it expects to report revenue of approximately $82 million and EPS of $0.04-$0.06 versus the $89 million to $90 million in sales it had previously forecast. Wall Street had been expecting the device maker to turn in a profit of $0.09 on $87.8 million in sales. AngioDynamics blamed the shortfall on sales attrition in its vascular access segment, procedure volume softness in its peripheral vascular segment, and capital equipment purchase delays in its oncology/surgery segment.


Now what: This is a bit of a toss-up because these all could very easily be short-term issues. Then again, procedure softness and sales attrition could easily signify a shift away from AngioDynamics' products which would negatively impact its sales for more than just one quarter. Beyond making acquisitions, AngioDynamics' organic growth isn't anything to write home about -- sales are expected to grow by just 7% in 2014 according to the Street's estimates -- so at 22 times forward earnings, I'm more than happy to stay on the sidelines.

Craving more input? Start by adding AngioDynamics to your free and personalized watchlist so you can keep up on the latest news with the company.

While you can certainly make huge gains in device makers like AngioDynamics, the best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.

The article Why AngioDynamics Shares Tumbled originally appeared on Fool.com.

Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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