The accompanying table (click to enlarge) includes 39 companies in the ETF Innovators (ETFI) Emerging Diagnostics Index of U.S.-listed stocks with market caps of $10-$200M. The index includes diabetes care device makers such as DexCom (DXCM), personalized medicine lab service providers such as Clarient (CLRT), clinical diagnostic test developers such as OraSure (OSUR), diagnostic imaging service providers such as Virtual Radiologic (VRAD), diagnostic equipment makers such as Vision Sciences (VSCI), and genetic analysis + molecular diagnostic companies such as Affymetrix (AFFX).

AFFX is a stock I wrote about in late July as a value trap to avoid at over 7 bucks due to a string of poor results and lowered guidance. While the results are still poor and Illumina (ILMN) continues to dominate its now much smaller rival; the price for AFFX is now under 3 bucks and is getting so low that it could be acquired or will rebound sharply at any sign of improved results. However, with the current bear market for research spending by academic institutions + big pharma, a lack of near-term catalysts, and a $73M cash-funded acquisition of Panomics to expand its cellular + genetic analysis capabilities; I plan to keep AFFX on my watch list for a possible buy as a turnaround play.

Since I first wrote about Home Diagnostics (HDIX) 10 days ago as a value, turnaround play in the Healthcare Cost Containment Index, the shares have increased about 10%, but are still trading well below the 52-week high of just under 11 bucks reached in early September. HDIX makes blood glucose monitoring systems and testing supplies under the TRUE and Prestige brands, in addition to partnering with major drug chains and wholesalers for private label and store brand alternatives to more expensive name brands such as Abbott Lab's (ABT) Freestyle or Johnson & Johnson's (JNJ) One Touch.

Key factors to watch will be a return to sales growth in the low teens (13%-15%) and gross profit margins improving into the low sixties (62%-63%) as the Company ramps up its manufacturing capacity for the two new products and phases out the promotional activities.