Cepheid (CPHD) is the world leader in genomic based diagnostic testing, has the most accurate and fastest testing system for a variety if illnesses and increasingly dominates the market for testing for Hospital Acquired Infections (HAIs) and tuberculosis. This latter test is the only one recommended by the World Health Organization (WHO), for it enables doctors to identify the strain of TB and therefore the appropriate antibiotic, avoiding trial and error. Revenues grew more 20% in 2012 to $330 million and I expect rapid growth for several years. Simply put, Cepheid makes a far better widget and hospitals desperate to reduce the cost of treating HAIs are turning rapidly to CPHD systems.
CRIS and CGEN can be considered speculative; CERS is an emerging company, CPHD is an established company pulling away from its competitors. Investments in these outfits should be according to their risk profile – a split position of these four, or two positions split four was, will, in my mind, easily outperform the S+P for several years to come.