Thinly traded AtriCure (ATRC +6.8%) is up on average volume, a modest 200K shares, as JPMorgan steps in to defend the stock after yesterday’s 10% selloff in apparent reaction to a bearish report from Culper Research.
Culper believes that there is 57% downside risk in the stock citing pressure on its open heart segment (65% of revenues) as procedures migrate to minimally invasive approaches to treat atrial fibrillation. It also questions the objectivity of a group of physicians that the company generously pays ($19.8M from 2013 – 2018) to promote their minimally invasive procedures directly to patients and an ongoing U.S. Justice Department investigation into its promotional activities (off-label use).
JPMorgan’s Robbie Marcus (Overweight/$40) counters that Culper’s information is neither new nor material and believes that the selloff represents an attractive buying opportunity.
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