Can Synovis Soar Again After Its Pegasus Acquisition?

When Synovis Life Technologies (SYNO) (15.72, $181mm market cap) reported in late May, I thought I had let a great opportunity slip away. I had recently added this pure-play in biological materials used in surgery to my watchlist, as it is a member of an elite group of companies in the Med-Tech space with gross margins above 60% and little or no exposure to capital spending. I have written about a couple of others, including Somanetics (SMTS) last week and Volcano (VOLC) earlier this summer. SYNO reported a great quarter, yet again, but it announced that it was going to be hiring salespeople. I mistakenly took this long-term bullish but short-term costly action as a possible catalyst for the stock to pullback even further than it already had. Instead, it ran from its close of 14.24 to a high of almost 20 in the next few days and a peak of almost 22 five weeks later. As you can see in the chart below (click to enlarge), it looked like I had let a great one get away: