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 21, 2000

Our hopes of a quick bounce off support were put to rest on Wednesday, as a gap at the open sent shares falling below our stop of $47.88. Because the stock opened below our established stop, we we’re forced out at the $47.50 opening price. This weakness was likely due to heavy selling throughout the biotech sector. The AMEX Biotechnology Index (BTK) had one of its bigger one-day declines with a fall of 9%. We’ll keep you updated on future plays as they develop.

Picked on December 12th @ $53.00
Profit/Loss = -5.50 (-10%) (Stopped Wednesday @ $47.50)
Best Profit = -0.25 ( 0%)
Stop Loss @ $47.88

December 19, 2000

In addition to its leading role in the preservation of human tissue, CRY is also developing and marketing a growing line of surgical adhesive products. The company’s key adhesive product, BioGlue, offers enormous advantages over sutures and staples, including less risky treatment and a more effective healing process. As for our play, CRY shares began to break down just after the Federal Reserve announced that its sees a risk of a slowdown in the economy. Although the Fed sees a risk, it chose to leave interest rates unchanged, which produced heavy selling across the board. However, the good news for our play is that shares still managed to hold above their previous low of $48.19. On the upside, we’ll now look for $50 to present our initial challenge, strengthened by the 5-dma of $49.40. The all time high of $55.25 will offer tougher resistance and could be a good level to lock in gains. Consider volume of 100,000 shares or better to confirm advances through support prior to opening positions. Strength in the AMEX Biotechnology Index (BTK) will help to reconfirm entries ahead of the December 27 split payable date.

Picked on December 12th @ $53.00
Change since picked –4.69
Stop Loss @ $47.88

December 17, 2000

Cryolife is currently performing over 75% of all cardiovascular tissue grafts in the U.S. In October, the company was given a boost when its SynerGraft pulmonary heart valve received product approval for distribution in Europe. Since this announcement, CRY has put together a strong uptrend, which now may be gearing up for another run after pausing briefly in late November. The stock is currently oscillating in the $50 range. We believe that lighter volume and a tight consolidation over the last two trading days may have positioned the stock for a near-term advance into the payable date of 12/27. In order to do this, the stock will first have to retake resistance at $50. Look for good volume (100 thousand shares or more) to accompany a break through and close above this level prior to opening new positions. However, aggressive buyers may want to consider accumulating shares at their present levels. We'll expect Friday's low of $48.13 to help bolster good support at the $48 mark. If prices retrace to this level and reverse sharply on good volume, this may mark a good, lower risk entry point. Set stops just below this level at $47.88 to prevent additional losses. Consider reconfirming entries with strength in the AMEX Biotechnology Index (BTK.X). Support and resistance will be used for determining our entries and exits ahead of the December 27th payable date. Buyer beware, however, as Cryolife trades on very low volume, which can have the effect of increased volatility.

Picked on December 12th @ $53.00
Change since picked -3.31
Stop Loss @ $47.88