INGN: The Biggest ‘Valuation’ Pig I know Of in the Stock Market

I am short this medical “device” company not because of its chart, which is finally starting to at least give a hint of negativity…

…but because of its valuation, especially as the valuation relates to its product, which is Oxygen Concentrators.  Those are not medical devices, they are boxes stuffed with valves, manifolds and tubes that manage oxygen delivery.

Here is some Robo-analysis from Simply Wall Street telling you…

Why Inogen Inc (NASDAQ:INGN) Could Be A Buy

But I think that a forward P/E of 89 (it was over 90 when I shorted it) and a P/S of 14 (both per Yahoo Finance) is a little excessive; don’t you? I mean, those figures are up there with the likes Intuitive Surgical – itself over valued considering the competition coming into the Robotic Surgical space – but the thing is, Inogen makes these boxes in a segment of Healthcare that is highly competitive because a) it’s just a box with stuff that regulates oxygen in it, b) it’s subject to Medicare and associated pricing pressures and c) there are a lot of competitors with similar products.

I am sure Inogen is a fine company. Maybe even the best Oxygen Concentrator company out there. But that valuation could choke a horse. It smacks of Wall Street suits – the guys in Armani who never scuffed their shoes on a shop floor – running another abstract play, chasing our long-favored (but now over valued) medical “device” sector like they did a few years ago with another thing from my old manufacturing days, 3D Printing (ref. 3D Printing: No Barrier to Future Losses for Investors).

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