Closing Accuray Position

By Travis Johnson, Stock Gumshoe, November 10, 2010

I can be patient to the point of stubbornness, but Accuray (ARAY) has finally convinced me that they’re never going to become consistently profitable or to grow at the level that their business plan requires, so I’m closing my ARAY position today at a substantial loss.

Accuray may well turn into a successful company someday, but I’ve held shares for quite a while and have now been through too many earnings cycles of comments along the lines of, “we lost money this time, but we’re on the verge of getting sales volumes and recurring revenue to the point where we’ll be profitable.” I just don’t see a catalyst for improvement — I was willing to give them some time to build the case for their Cyberknife, but I am underwhelmed at their progress on that front (unless they’re able to build a strong PR case, like Intuitive Surgical, their device looks extremely expensive — hospitals seem to buy these kinds of things in large numbers only when their patients — and thus doctors — demand them, and I don’t see that kind of groundswell).

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