Critical Review: New England Nuclear (LNTH) and Vermillion (VRML)

New England Nuclear (NASDAQ: LNTH) and Vermillion (NASDAQ:VRML) are both small-cap medical companies, but which is the better business? We will compare the two businesses based on the strength of their risk, earnings, profitability, dividends, valuation, analyst recommendations and institutional ownership.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for New England Nuclear and Vermillion, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
New England Nuclear 0 1 3 0 2.75
Vermillion 0 0 1 0 3.00

New England Nuclear presently has a consensus target price of $24.00, indicating a potential upside of 53.35%. Vermillion has a consensus target price of $2.25, indicating a potential upside of 74.42%. Given Vermillion’s stronger consensus rating and higher probable upside, analysts clearly believe Vermillion is more favorable than New England Nuclear.

Profitability

This table compares New England Nuclear and Vermillion’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
New England Nuclear 38.32% -145.14% 11.84%
Vermillion -336.33% -206.13% -117.38%

Institutional & Insider Ownership

90.8% of New England Nuclear shares are held by institutional investors. Comparatively, 29.7% of Vermillion shares are held by institutional investors. 1.2% of New England Nuclear shares are held by company insiders. Comparatively, 3.7% of Vermillion shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares New England Nuclear and Vermillion’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
New England Nuclear $331.38 million 1.81 $123.38 million $1.00 15.65
Vermillion $3.12 million 28.96 -$10.49 million N/A N/A

New England Nuclear has higher revenue and earnings than Vermillion.

Risk & Volatility

New England Nuclear has a beta of 1.51, meaning that its stock price is 51% more volatile than the S&P 500. Comparatively, Vermillion has a beta of 2.14, meaning that its stock price is 114% more volatile than the S&P 500.

Summary

New England Nuclear beats Vermillion on 7 of the 12 factors compared between the two stocks.

New England Nuclear Company Profile

Lantheus Holdings, Inc. develops, manufactures, and commercializes diagnostic medical imaging agents and products that assist clinicians in the diagnosis and treatment of cardiovascular and other diseases worldwide. Its principal products include DEFINITY, an ultrasound contrast agent used in ultrasound exams of the heart; TechneLite, a technetium generator that provides the essential nuclear material used in nuclear medicine procedures; and Xenon, a radiopharmaceutical gas used to assess pulmonary function and imaging cerebral blood flow. The company also offers Neurolite, an injectable that is used to identify the area in the brain where blood flow has been blocked or reduced due to stroke; and Cardiolite, an injectable technetium-labeled imaging agent used in myocardial perfusion imaging (MPI) procedures that assess blood flow distribution to the heart. In addition, it provides injectable radiopharmaceutical imaging agents, such as Thallium Tl 201 that is used in MPI studies to detect cardiovascular disease; Gallium Ga 67, which is used to detect various infections and cancerous tumors; FDG, a fluorine-18-radiolabeled imaging agent to identify and characterize tumors in patients undergoing oncologic diagnostic procedures; and Quadramet, a therapeutic product, which is used to treat severe bone pain associated with metastatic bone lesions. Further, the company is developing Flurpiridaz F 18, which is in Phase III clinical trials to assess blood flow to the heart; LMI 1195 that has completed Phase I clinical trials for assessing cardiac sympathetic nerve function; and LMI 1174, which is in pre-clinical development targeted to elastin in the arterial walls and atherosclerotic plaque. The company sells its products to hospitals, clinics, group practices, integrated delivery networks, group purchasing organizations, and radiopharmacies. Lantheus Holdings, Inc. was founded in 1956 and is headquartered in North Billerica, Massachusetts.

Vermillion Company Profile

Vermillion, Inc., together with its subsidiaries, discovers, develops, and commercializes diagnostic and bio-analytical solutions that help physicians to diagnose, treat, and enhance gynecologic health outcomes for women primarily in the United States. The company's diagnostic tests include OVA1, a blood test for the pre-surgical identification of women who are at high risk of having a malignant ovarian tumor; and Overa, a multivariate index assay second generation test to determine the malignancy of ovarian cancer in women. It also offers in-vitro diagnostic (IVD) trial services to third-party customers; and laboratory services to meet the needs of IVD manufacturers to commercialize high-complexity assays. The company serves clinical reference laboratories, hospital laboratories, and physician offices. Vermillion, Inc. was founded in 1993 and is headquartered in Austin, Texas.

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