This column is for investors willing to take more risk and potentially receive more reward.  The stocks mentioned in this column are not recommended to buy or sell.  They're brought to your attention so you can investigate them further to determine if they fit your risk profile.  Most of the stocks will have less than $1 billion of market capitalization, have more volatility than other stocks, and oftentimes no earnings.  And some will have tremendous stories.

September 4, 2009 - ev3 Inc. (EVVV-NASDAQ) operates as an endovascular company that focuses on identifying and treating peripheral vascular disease, including lower extremity arterial disease and neurovascular disease. It develops, manufactures, and markets a range of products that include stents, atherectomy plaque excision products, thrombectomy and embolic protection devices, percutaneous transluminal angioplasty balloons, and other procedural support products for the peripheral vascular market.

It sells products in the United States, Europe, and Canada through a direct sales force; and through distributors in other international markets. Customers include a section of physicians, including interventional radiologists, neuroradiologists, vascular surgeons, neuro surgeons, endovascular specialists, and interventional cardiologists. ev3 Inc. was founded in 2000 and is headquartered in Plymouth, Minnesota.

The stock hit a low of $3.37 late last year and has bounced almost straight up, giving shareholders a return of 250% since November. Even the March meltdown didn't slow ev3 as it continued to climb to its current level. Probably has something to do with the fact that the company finally reported a profit in the second quarter of this year with analysts seeing more black ink from now on.

Losses were piling up. In 2005 when the company went public, lack of earnings per share was a deficit of $4.48. Things improved to a negative 93 cents in 2006. Then they got worse as earnings dropped to a minus $2.37. Last year was better though still negative at a loss of 35 cents. This year, 9 analysts estimate 12 cents on the positive side, then see 30 cents in 2010. That's as far as their crystal ball can see. Several factors suggest continued profitability growth: manufacturing operations were recently consolidated which should add to better margins; and the company is now selling its own angioplasty made balloons rather than those made by a third party; plus sales are increasing.

ev3 bought Chestnut Medical Technologies recently. That increases its market reach into neurovascular products including the Pipeline embolization device for the treatment of cerebral aneurysms and the Alligator retrieval device to remove foreign bodies. The Pipeline device still needs FDA approval which should come in 2011. Upon approval, the company will pay another $75 million (on top of the $25 million already spent) to Chestnut shareholders. The device is likely to become the first choice for treatment for aneurysm patients once approved which suggests a potential market opportunity of $350 million for ev3.

More numbers: Price to sales is 3.28. Price to book is 1.91. Total cash is $60.36 million. Total cash per share is 54 cents. Total debt is $7.71 million, less than 1% of capital. Current ratio is 2.77. Book value per share is $6.48. Beta is a relatively high 1.57. 52-week low was $3.37, high was $13.19. Shares outstanding: 112.10 million but the float is only 72.34. Insiders own 32.12% of the stock; institutions have 52.7%. There is no dividend.

Aggressive investors should find this stock of interest. Sales and profits are ramping, and the new Pipeline device, if approved, has the potential to almost double current revenues. But, if it doesn't get the green light, this stock is vulnerable.

 Company Web site: www.ev3.net

- Ted Allrich