), a leader in non-invasive monitoring technology for patient
care, recently disclosed that IWK Health Centre, a well known
Canadian healthcare facility, had adopted Masimo SET pulse
oximetry and sensor know-how.
Over 100 stand alone clinical evaluations have established that
Masimo SET technology permits medical practitioners to correctly
gauge saturation level of blood oxygen even in difficult
situations, such as those involving motion of the patient. IWK's
adoption of Masimo SET pulse oximetry is in line with its
commitment to quality of care.
IWK Health Center is one of east coast Canada's important
healthcare facilities for both tertiary and primary healthcare.
The facility is engaged in research work, promotes better living
and imparts education to healthcare professionals.
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.
Another material upside is the rising proportion of recurring
revenues on the back of growing installed base. For its SET
offering, Masimo continues to surpass the market growth rate with
a year-over-year improvement of 11% in its worldwide installed
base in the third quarter of 2012. While Masimo's patented SET
offering remains its mainstay, the rainbow measurements represent
another growth driver beyond hospital care.
However, the company's reliance on third-party providers like
OEMs for a part of its business and customer concentration raises
concern. Additionally, we remain concerned about Masimo's
reliance on group purchasing organizations for the sale of its
pulse oximetry products to hospitals in the domestic market.
We also note
) effort to expand its oximetry and monitoring products
portfolio. The company recently won U.S. Food and Drug
Administration (FDA) 510(k) approval as well as European Economic
Area (EEA) CE Mark clearance for its Nellcor Bedside Respiratory
Patient Monitoring system.
We currently have a long-term 'Neutral' recommendation on Masimo.
The stock carries a Zacks #3 Rank, which translates into a
short-term Hold rating.
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