Biomet, Inc. designs, manufactures and markets products used primarily by orthopedic medical specialists in both surgical and non-surgical therapy. For the nine months ended 2/28/01, net sales rose 10% to $740M. Net income rose 12% to $138.4M. Revenues reflect continued penetration of the reconstructive device market and higher sales of fixation products. Earnings also reflect increased sales of higher margin products.

May 3, 2001

Biomet provides a wide variety of medical devices such as electrical bone growth stimulators, spinal implants, and bone cements, used primarily by musculoskeletal specialists. Shares of BMET have performed well over the past year. The stock has gained over 97% from is 52-week low of $21.33 on 5/23/00. BMET has been trending higher over the past four weeks, and we believe that the stock could break out to new highs. We are also looking for a split announcement following the June 17th earnings release or its next BoD meeting, expected on June 29th. The company already has enough shares for a split, with 500 million shares authorized and 179 million shares out standing, and the stock is its within historic split range. From a technical standpoint, support is the 10-dma at $41.11 with stronger support at $40.35, the April 27th intra-day low. Resistance is the all-time high of $43.68 and then possibly $44 or $45. Look for entry points on a bounce off of $41.11 or a breakout above $43.68 on volume greater than 900,000 shares by noon. We plan to set stops at $39.50 as downside protection.

Picked on May 3rd @ $42.16
Change since picked +0.00
Stop Loss @ $39.50

May 10, 2001

Biomet has been under pressure all week. On Thursday, shares of BMET fell to an intra-day low of $39.55 before bouncing back to a close of $39.81 on light volume of 981,000 shares. The stock breached key support levels at the 20-dma and the $40 mark over the past two days. However, the downward trend is showing little conviction as the stock moves lower on declining volume, so a positive volume surge could be able to snap the downward trend. In the meantime, support has come in at Thursday’s intra-day low of $39.55 with stronger support at $39.33, the April 25th intra-day low. However, we do not plan to stick around if BMET dips below $39.50. Resistance has fallen to the 5-dma at $41.22 and then the 10-dma at $41.78. Look for a bounce off of $39.55 or a move above $41.22 on midday volume of at least 900,000 shares before starting new plays. Our stops are holding steady at $39.50.

Picked on May 3rd @ $42.16
Change since picked –2.35
Stop Loss @ $39.50

May 8, 2001

Biomet has been consolidating on light volume over the past five sessions. On Tuesday, shares of BMET fell to an intra-day low of $40.50. However, the stock made a recovery after a test of the 20-dma. BMET ended the day at $41.30 on volume of 1.33 million shares. The stock closed below the 10-dma for the first time since April 16th and it is beginning to form a short-term downward trend. On the positive side, the move is coming on light volume so BMET may be able to hold the $40 mark if the stock continues to trend lower. Going forward, support has fallen to the 20-dma at $40.40 with additional support at $40, the April 19th intra-day high. Resistance is now at Monday’s intra-day high of $43 and then the all-time high of $43.68. Traders should be looking for entry points on a bounce off of $40.40 or a move above $43 on volume greater than 900,000 shares by noon. We are leaving our stops at $39.50 to limit potential losses.

Picked on May 3rd @ $42.16
Change since picked –0.86
Stop Loss @ $39.50

May 6, 2001

Biomet, Inc opened in negative territory on Friday, thanks to a weak employment report. However, the stock moved quickly off its lows along with the AMEX Biotech Index (BTK.X). Shares of BMET ended the session at $42.55 on volume of 1.93 million shares. The stock is giving a mixed signal, with three consecutive lower lows within a long-term upward trend. Therefore, BMET may spend some time consolidating in the $41-$44 range. The company is expected to announce earnings on June 17th and we are looking for a split announcement with the release or with the next BoD meeting, expected on June 29th. BMET has enough shares for a split, with 500 million shares authorized and 179 million shares out standing, and the stock is within historic split range. The Board set a 3:2 split last June when the stock was trading in the $30-$40 range. For now, support is the 10-dma at $41.42 with additional support at $40.35, the April 27th intra-day low. Resistance has fallen to Friday’s intra-day high of $43 and then the all-time high of $43.68. Traders may consider starting new plays on a bounce off of $41.42 or a move above $43 on volume greater than 900,000 shares by noon. Our stops remain at $39.50.

Picked on May 3rd @ $42.16
Change since picked +0.39
Stop Loss @ $39.50