What does Vizient Award Mean for Skyline Medical Inc. (NASDAQ:SKLN)?

Skyline Medical Inc. (NASDAQ:SKLN)

Skyline Medical Inc. (NASDAQ:SKLN) shares are trading in massive volumes. The averga daily trading volume is just short of 600,000 but by mid-morning over 11.5 million shares have traded hands. SKLN shares closed yesterday at $1.92 but this morning reached $3.25 before dropping back.

The catalyst for the large move was an announcement that Skyline Medical Inc. (NASDAQ:SKLN) received an Innovative Technology contract from Vizient, Inc. Vizient is the largest, member-driven health care performance improvement company in the country. Innovative Technology contracts are reserved for technologies that demonstrate an ability to enhance clinical care or patient safety, and those that improve an organization’s care delivery and business model. Eagan, MN-based Skyline Medical manufactures environmentally conscience systems for the collection and disposal of infectious fluids that result from surgical procedures and post-operative care.

The Vizient deal, a year in the making, enables Skyline Medical’s system to be added to Vizient’s contracts without going through competitive bidding. For investors, the great unknown is how much this will affect future revenues and earnings as there is no actual value attached to it. No doubt analysts are crunching numbers today so as to get a better grip on the award’s financial impact. The uncertainty was reflected in price action early as the daily high ($3.25), so far, was reached less than five minutes into trading. As the realization that the award’s impact will be difficult to forecast into future earnings, the price action has become more stable – trading between $2.70 and $2.90.

There is no doubt the news is welcome and well deserved. Earnings have been hard to come by for Skyline Medical Inc. (NASDAQ:SKLN) shareholders. In 2011 the firm lost an EPS of $346. 55 which improved in 2015 to an EPS loss of $30.86.The number of outstanding shares has also been trending against long-term shareholders. In 2011 there were 10,000 shares outstanding. That figure has increased each year and in 2015 there were 160,000 outstanding shares. Sales did improve from 2011 ($100,000) to 2014 ($1million) but fell back to $700,000 in 2015.

3/1/2017
Ticker Symbol SKLN
Last Price a/o 11:07 AM EST  $                      2.74
Average Volume                    593,500
Market Cap (mlns)  $                    12.23
Sales (mlns) $0.50
Shares Outstanding (mlns) 6.37
Share Float (mlns) 5.93
Shortable Yes
Optionable No
Inside Ownership 1.10%
Short Float 10.22%
Short Interest Ratio 1.02
Quarterly Return -55.71%
YTD Return -31.43%
Year Return -87.81%

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: James Marion is a University of Houston student studying Business with a concentration in Finance.

Author: James Marion

James Marion is a University of Houston student studying Business with a concentration in Finance. James has interned with several investment professionals and hopes to pursue a career as a professional stock analyst after graduation.

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