Biomet, Inc. designs, manufactures and markets products used primarily by orthopedic medical specialists in both surgical and non-surgical therapy. For the three months ended 8/31/00, net sales rose 8% to $230.3M. Net income rose 18% to $48.4M. Revenues reflect continued penetration of the reconstructive device market and higher sales of fixation products. Earnings also reflect increased sales of higher margin products.

December 3, 2000

Biomet is a medical equipment company that concentrates on the field of orthopedics. Their multi-faceted product line includes surgical equipment, general orthopedic treatment equipment and even dental implants. Shares of Biomet have done an excellent job of sidestepping the NASDAQ disaster. The stock is now trading at a level that previously has inspired management to announce a split. Biomet's last split announcement was announced in early July when the stock was trading at $38.00. The 3:2 split was made payable in early August. In recent weeks, Biomet has been strong enough to establish new all-time highs. The most recent new high occurred on November 21st at $40.38. Recently, the stock has been pulling back and on Friday the stock went back to test its 50-DMA of $35.63. This price should provide near term support. We have set our stop at $33.00 to avoid a major downdraft in the stock. Looking at the indicators, the MACD is clearly in decline and needs to reverse course for us to regain confidence in this play. The OBV remains strong, even though it is currently going sideways. We would like to see this indicator resume its up trend. Earnings are due on December 14th and, if we are not stopped out, we will exit this position before the earnings announcement.

December 7, 2000

Biomet shareholders have avoided the wild swings that the rest of NASDAQ traders have experienced. The fact that the company is near its all-time high and is trading at a level that has historically encouraged a split has helped to stabilize the share price. Biomet's last split was announced in July when the stock was trading at $38.00. The 3:2 split was paid to shareholders on August 8th. Biomet will be reporting their earnings on December 14th before the market opens. This would be a good time to announce another split. However, we will exit this position just before the earnings report, assuming that our stop is not triggered. The earnings report is expected to show solid growth of 16% over the same quarter a year ago. As for the technicals, the share price of Biomet has been slowly pulling back and has tested the 50-DMA of $36.06 a few times in the past week. If a split/earnings anticipation run is to take place, this support will probably need to hold. It is encouraging that today's pullback occurred on light volume of only 770,000 shares, or just barely more than half of the three-month average daily volume. Today's high of $38.06 should provide short-term resistance.

Picked on October 31st @ $36.19
Change since picked +0.31
Stop Loss @ $33.00

December 5, 2000

This innovator and marketer of orthopedic medical equipment braced itself against the NASDAQ correction with remarkable strength. Therefore, it is not surprising that the stock only managed a modest gain today as money poured into "oversold" technology stocks instead of pushing up momentum plays like Biomet. The stock is trading at a level that has previously encouraged management to announce a split. Biomet's last split occurred in August. The 3:2 split was announced when the stock was trading at $39.00 in conjunction with the earnings release. The next earnings release is December 14th. Biomet could easily make some new highs as we approach the earnings release date. Bullish traders may try to anticipate a solid earnings report as well as a split announcement. Biomet established a new high today of $41.00. Unfortunately, the stock pulled back from that level, as the emphasis was on mainstream technology stocks. However, the mere fact that Biomet did make a new high puts the stock in some very lonely company on the NASDAQ. $41.00 is now the mild resistance, and if the stock can trade above this resistance tomorrow, a renewed up trend may ensue. The 20-DMA, which is just slightly below $38.00 should provide the initial support. There is more substantial support at $36.00, which is just above the 50-DMA. We have a trailing stop suggestion in our In Play section and if we are not stopped, we will exit this position either just before the earnings release or right after a split announcement.