There are no safe havens in the stock market. Every stock carries risk. But some less than others. This column features stocks that have shown one or more of the following characteristics: less volatility, better earnings, larger market caps, safe and increasing dividends. In these times of turmoil, our goal is to show readers better opportunities for investing with fewer risks.

May 30, 2011 - Edwards Lifesciences Corporation (EW-NYSE) provides products and technologies designed to treat advanced cardiovascular diseases. It offers heart valve therapy, critical care, cardiac surgery systems, and vascular diseases.

In addition, the company provides cardiac surgery systems products, including cannulae, intra-aortic filtration system, and other disposable products used during cardiopulmonary bypass procedures; and vascular products that comprise balloon-tipped and catheter-based embolectomy products, surgical clips, and clamps to treat endolumenal occlusive disease.

Edwards Lifesciences Corporation sells through a direct sales force and independent distributors worldwide. It has a collaboration agreement with DexCom, Inc. to develop products for monitoring blood glucose levels in patients hospitalized for various conditions. The company was founded in 1999 and is headquartered in Irvine, California. Edwards Lifesciences Corporation operates independently of Baxter International Inc., as of March 31, 2000.

If only we all owned EW since 2000, we'd all feel better. The stock traded at $6 a share back then. On March 3, it changed hands at $91.82 (all prices adjusted for a 2 for 1 stock split done in late 2010). In fact in the last 52 weeks, the stock is up by 73.48%. Is there more fuel in the tank for further gains?

The first quarter was a good indicator of how things are going. Earnings were 53 cents, well above the 40 cents in last year's first. That was a 26.20% upside surprise over analysts' consensus estimate of 42 cents. Management said all its products saw increased demand. The strongest orders came from abroad but the U.S. division saw an 8% increase in sales. Japan was up more than 20%. Margins stayed healthy even with large outlays for R & D related to new transcatheter heart valves and higher marketing expenses for its new SAPIEN heart valve, scheduled to launch in October of this year. When that launch starts, expect margins to be squeezed somewhat due to specific expenses related to the new valve. But those will only be incurred this year. Margins should widen again next year.

The one caveat in all this good news: investors love, love, love this stock. They've bid up the price to levels that demand perfection (beyond perfection into solid surprises.....every quarter). With a P/E of 45, it's one of the richer stocks in terms of valuation for stocks that report earnings. Any disappointment from an earnings shortfall will most likely cause this rocket to falter, start heading back to earth.

Essential numbers: While the Trailing P/E is rich, the Forward P/E is a little more reasonable, but not by much: 31.6. Price to sales ratio is 6.65. Price to book is 7.41. In the last 52 weeks, Operating margin was 19.85% and Profit margin was 15.50%. Return on equity was 18.67% and Return on assets was 10.61%. Cash per share is $3.78. Total debt is relatively small $149.5 million. Total debt to equity is 11%. Current ratio is 2.58. Book value is $11.83. There are 114.68 million shares Outstanding with a Float of 113.61 million. Insiders own .72% and Institutions have 89.5% of the Float. There is no dividend. Financial Strength of the company is A+.

Any investor would have benefitted from owning this stock in the last 10 years. Conservative investors should still find it of interest: higher earnings every year, new products, very little debt, consistent management, and increasing demand for its products. These all add up to strong potential. The only question is: how much of that potential is already baked into the stock's price? Right now, it would appear quite a bit. But if earnings surprises continue, there's no reason to think higher prices won't follow.

- Company Web site: www.edwards.com

- Ted Allrich