Dynatronics Corporation (DYNT)

[S3lfMade]

One to watch tommorow and into next week.... Earnings on Monday.... Been in a great uptrend and today's high of $2.14 is the stocks all time high.... Blue skies above! Only 13m O/S, with 8m float.... RADAR~ May see $3-$4 pretty quik here.

Company Profile Dynatronics manufactures, markets and distributes advanced-technology medical devices, orthopedic soft goods and supplies, treatment tables and rehabilitation equipment for the physical therapy, sports medicine, chiropractic, podiatry, plastic surgery, dermatology and other related medical, cosmetic and aesthetic markets. More information regarding Dynatronics is available at http://www.dynatronics.com.

April 18, 2011... 10 Medical Device Companies With Plenty of Upside....Dynatronics (DYNT): Dynatronics is a capital equipment maker of physical therapy equipment. Recently, hedge fund manager, Joseph Levy, wrote a comprehensive article on Dynatronics, discussing the major transformation the company has completed after securing three significant contracts with Group Purchasing Organizations (GPO’s). http://seekingalpha.com/article/264036-10-medical-device-companies-with-plenty-of-upside?source=yahoo

Although DYNT has enjoyed a significant move higher since Levy’s article was published, the stock is still quite cheap when one factors in the company’s future prospects over the next 12-24 months. After speaking with management and listening to its March conference call, it seems clear that the revenues, combined with the higher gross margins attached to these contracts, will significantly expand the company’s profitability over the next two fiscal years.

With a fixed cost structure in place and no need to ramp up its current level of SG&A, every $5M increase in sales should translate into an additional $0.07 a share in earnings for the company.

Assuming the Dynatronics can conservatively grow its revenues 12-15% over the next two fiscal years, DYNT’s earnings should grow 100%+ during this time, allowing for $0.11 a share in FY 2011 and $0.23-$0.24 a share in FY 2012. Currently, the biggest problem in owning DYNT is the company’s relative obscurity!

This will shortly change, however, as new investors discover the story and discern the leverage in the company’s model. If our analysis is correct, we think DYNT could be $4-$5 within twelve months. As such, we remain avid buyers on any pullbacks to $1.60-$1.70 next week.