Good news in the haystack
And now for something completely different: A story about a stock that has made money.
Everyone knows how scarce profitable stock investments have become. I decided to look for a few needles in the tallest haystack of them all, that period from the stock market peak in October 2007 to the current depressing lows. I looked in our own backyard, within the borders of Massachusetts.
Exactly how bad has it been during that stretch? The Standard & Poor's 500 index lost nearly 52 percent, the kind of plunge that rightly draws Depression-era comparisons. Your chance of picking a real winner in that kind of disaster: Think scratch tickets.
For the record, there are actually 11 Massachusetts stocks that closed yesterday's market session at higher prices than they commanded on Oct. 12, 2007. That's 11 out of 232 local stocks. But even those numbers are deceptively optimistic.
Some of the lucky 11 are small companies with share prices that bounce around. Others gained ground for fluky reasons. Only two commanded a stock market value of more than $1 billion. For my money, the best of the bunch was Haemonetics Inc. of Braintree.
Haemonetics, which makes equipment, software, and disposable products for medical people who process blood, hasn't shot the lights out in the stock market. The company's shares have climbed only 6 percent during the wretched period I measured, but they held fairly steady through the whole ordeal. That counts for something.
In an economy that has gone bad and may get worse, Haemonetics has boosted sales and earnings by double digits. Forecasts, at least for the near future, remain optimistic.
"We expect any negative impact in [the company's new fiscal year] to be modest," chief operating officer Brian Concannon told investors earlier this month.
"Try to run a hospital without blood, it's impossible," said Concannon, who is scheduled to succeed Haemonetics chief executive Brad Nutter in April.
That's certainly true, but the emphasis on medical centers and management of blood for transfusions is only part of the business. And, for now, it's not the most important part driving the company's growth.
Pharmaceutical companies use blood plasma as raw material for dozens of drugs and treatments. Demand from those companies is booming, and Haemonetics owns most of the market share for products used to extract plasma from paid donors.
Haemonetics sells equipment that can separate red blood cells, platelets, and plasma from blood, then extract whatever is needed and return the rest to the donor. It makes money selling the equipment, but earns a lot more selling disposable products used in each procedure - the only disposables that will work with their hardware.
Sound familiar? It's the same model Gillette uses selling razor blades. Get the basic hardware in a customer's hands and then make a fortune selling piles of disposable parts that get the job done.
So-called plasma disposables sold by Haemonetics are up 30 percent to $150 million through the first nine months of the company's current fiscal year. They make up one-third of all Haemonetics' sales.
Plasma demand has gone through booms and busts, but analysts expect it to remain strong in the near term. And Haemonetics is selling more hardware to take advantage of the business.
Analyst David Turkaly of Susquehanna Financial Group says Haemonetics installed about 2,000 machines last year and each one has the potential to generate $13,000 in disposable sales. He expects the company to install about 1,500 machines this year.
But Haemonetics is looking to other customers for a different kind of growth prospect. The company sees hospitals under budget pressure spending as much as 6 percent of their money on blood. The opportunity: Sell them information systems that track blood from donor to recipient more efficiently.
"At the heart of our business is blood, and transfusions are a critical part of every healthcare system around the world," Concannon says.
The budget pressure on those healthcare systems can put a crimp in sales of all medical companies, including Haemonetics. Stock prices among those companies, relative to their profits, have become compressed.
Haemonetics shares may feel that kind of pressure in the future. For now, it's the good-news needle in the haystack.
Steven Syre is a Globe columnist. He can be reached at syre@globe.com. 