Buy - Price 8.01 on March 7
by Roth Capital Partners

[Reduced] hospital spending continues to plague Natus [which specializes in newborn-care products and] has reduced its 1Q09 outlook. Total revenue is now expected to be in the range of $32.5 million to $33.5 million, below prior guidance of $37 to $38 million -- [off] roughly 12%...Earnings are also taking a hit, with GAAP-EPS now anticipated in the range of 1 cents to 2 cents, down from previous guidance of 6 cents to 8 cents, and reflecting a 5-to-6-cent miss. Management indicated that several large capital-equipment orders did not ship in 1Q, but believes these have been pushed out to later in the year....We maintain our Buy, [but] have lowered our target to 10.50, from 12.50, to reflect our reduced outlook in a challenging hospital-spending environment. Market cap: $224 million.

Medical company had ups and downs, last year (2007) showed its highest income for the last 5 years. Shows promising rise for long term.

Market Perform - Price 13.66 on Nov. 18
by Avondale Partners

With its newborn-hearing screening franchise, we believe Natus' sales team enjoys access to almost all hospitals in the U.S. We see Natus...broadening its product offerings, as with neurological monitoring, sleep diagnostics, jaundice treatment, and the Cool Cap... Recent acquisition of Excel-Tech's neurodiagnostic equipment to Natus' product line is a prime example of this strategy. [There are also] opportunities for growth overseas...[Natus' executives constantly seek] tuck-in acquisitions ...and like to pay roughly one to one-and-a-half times revenue. They target companies/products closely associated with their expertise that can help them reach their gross margin goal of 65%. Our target, 17, uses a forward price/earnings multiple of approximately 17 times on our 2009 EPS estimate of 99 cents. This multiple is in line with other medical-device companies'. Market cap: $382 million.

From a recent Mad Money show:


"I think the money's been made and we need to be careful."

From a recent Mad Money show:

"I think the money's been made and we need to be careful."

we love Natus in the NICU, especially their phototherapy lights

Watching the Insider Transactions

Natus Medical (BABY)
Investor David Nierenberg and his D3 Family Funds plan to vote against the reappointment of Deloitte & Touche as the company's auditor. The Nierenberg group said that Deloitte's audit bill for 2006 was "extraordinary and excessive" and may have contributed to the company's first-quarter earnings miss. Deloitte's bill for 2006 ballooned to $1.37 million, from $584,000 in 2005. The Nierenberg group has about 4.08 million shares (18.9%).

David Nierenberg, a well known activist investor and beneficial owner of the company has recently purchased 225,000 shares or $3,343,500 worth of stock.

Natus Medical Incorporated develops, manufactures, and markets neurodiagnostic and newborn care products.

Natus Medical announced Q1 earnings in early May. The company, which makes neurodiagnostic devices for infants, reported net first-quarter income of $1.5 million, or 7 cents per share, missing analysts' estimates by a penny, according to Thomson Financial.

good story