CryoLife, Inc. develops and commercializes technology for cryopreservation of viable human tissues for vascular, cardiovascular and orthopaedic transplant applications. For the 9 months ended 9/30/00, net revenues increased 17% to $58.6M. Net income increased 22% to $5.9M. Results reflect the growing acceptance of cryopreserved tissues, along with increased interest income.

December 12, 2000

CryoLife (CRY) is engaged in the development and commercialization of technology for cryopreservation of human cardiovascular, vascular, and orthopedic tissues for transplant. Cryopreservation involves the storage, shipment and controlled thawing of the tissue. So, how hot is this market? The company has been growing earnings at 29% annually and anticipates this same rate of growth for the next 5 years! Recognizing the potential for this company, investors have once again sent shares higher for another split run. On November 27, the company announced a 3:2 stock split payable on December 27. Currently, a strong advance above the recent all-time high of $51.63 leads us to believe that shares are on route to challenging $60. Good volume has also increased to nearly 200 thousand shares (two-times average daily volume) over the past two days, which helps to reconfirm the advance. With that said, we’ll be looking for today’s intra-day high of $55.25 to present our initial opposition. Expect $60 to be a tougher challenge, which could be a good level to lock in future gains. However, should we get a pullback prior to an advance, we’ll want to keep stops fairly tight at $47.88, to protect us against CRY’s high volatility. With this in mind, we believe that support could come ahead of this level at the intermediate high of $51.63 and just lower at $50. A sharp bounce from either of these levels followed by good mid-day buying of 100 thousand shares, will signal our entries. Consider using strength in the AMEX Biotechnology Index (BTK) to confirm bounces from support or advances through resistance. The payable day for the split is December 27th and an exit should be planned ahead of this day.

Picked on December 12th @ $53.00
Change since picked 0.00
Stop Loss @ $47.88

December 14, 2000

The emergence of molecular biology and tissue engineering has provided revolutionary advancements in the medical and biotechnology industries. CRY’s proprietary processes benefit from these advances and currently account for 70% of human cryopreserved tissue market. On the day, CRY shares managed to slip below major support at $50 to a close of $49. However, volume did come in extremely weak at 52,000 shares traded, so short-term selling may already be starting to dry up. In addition, previous support has come at $49, so the stock could certainly initiate a rebound from current levels. Further down, the last line of support could come at $48, just above our firm stop at $47.88. Each of these support levels could provide a good intraday buying point if volume can return. If this scenario unfolds, we’ll look for a rebound with good volume of 150,000 shares traded to face initial resistance at $50. A further run will face stiff opposition at the all time high of $55.25 and then $60. Remember to look for strength or weakness in the AMEX Biotechnology Index (BTK) to confirm your buys/sells. December 27th is the payable date for the split, so plan your exits ahead of this day.

Picked on December 12th @ $53.00
Change since picked –4.00
Stop Loss @ $47.88