It was only yesterday that we expressed interest in Meridian Biosciences (VIVO). Today, news came out that VIVO received FDA approval for their Clostridium difficile test. On the news, the stock jumped 8.28%.
The most recent (5/28/10) Value Line on VIVO had this to say about the stock:
"Illumigene is an important opportunity. Sales of C. difficile products have been hurt by the commercialization of new molecular tests by peers. In response, Meridian has created its own molecular test, illumigene. This product represents a more sensitive technology and should improve the company’s competitiveness in the C. difficile market. The test was recently launched in Europe and should receive approval in the U.S. before the start of fiscal 2011."Shares of untimely Meridian Bioscience should only appeal to income oriented investors. The stock’s generous yield appears to be secure, as management has stated its preference for a dividend-to profit ratio of at least 75%."
There are a couple of things that I like about what Value Line said about VIVO. First, VIVO is on track by getting approval for the test before the fiscal year end on September 30th. The company is meeting their goals as planned. Second, Value Line doesn't really like the shares. This is great because institutional momentum hasn't gained traction yet. With a dividend yield of 4.16% after the price increase today, VIVO is still worthy of consideration. The stock goes ex-dividend at the end of this month so get as much research in as you can.
As always, if we were to buy this stock at the current price it would be with the expectation that the shares could drop 50% and we'd be able to sleep comfortably at night. Keep an eye out for our Dividend Achiever Watch Lists, they contain many gems that have yet to be discovered by the broader market.