Welcome!

News Feed Item

The Zacks Analyst Blog Highlights:Henry Schein, Cyberonics, DexCom, Regeneron Pharmaceuticals and Bayer

CHICAGO, Feb. 11, 2014 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Henry Schein Inc. (Nasdaq:HSIC-Free Report), Cyberonics Inc. (Nasdaq:CYBX-Free Report), DexCom, Inc. (Nasdaq:DXCM-Free Report), Regeneron Pharmaceuticals, Inc. (Nasdaq:REGN-Free Report) and Bayer (OTC:BAYRY-Free Report).

(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Monday's Analyst Blog:

Top 3 MedTech Stocks, Poised to Gain on Earnings

The medical devices industry, once acclaimed for its high-paying jobs and research and development opportunities, has been facing the threat of both the 2.3% medical device excise tax since its enactment in the beginning of 2013 and sequestration-related spending cuts to the U.S. federal budget. In fact, these factors have significantly restricted the industry's bottom-line improvement this past year.

To make matters worse, this year, more spending cuts are expected to come into effect which will last through 2021. The medical devices spending cut, if not repealed, may take a grave turn in 2014, leading to serious consequences like delaying progress in medical breakthroughs, deterioration in job creation, and tempering of economic growth.

The imposition of medical device excise tax as part of the Obamacare roll-out is taking a heavy toll on the medical devices sector, hurting pricing decisions of participants and subjecting them to tremendous margin pressure.

However, as a ray of hope amid this difficult scenario, National Institutes of Health (NIH) recently won a $1 billion or 3.5% increase in its fiscal 2014 budget from the previous year's post-sequestration budget (according to fiscal 2014 Omnibus Appropriations bill released on Jan 13, 2014). As per a recent report published in lexology.com, this hike – although not sufficient – is expected to result in 385 million new grant opportunities for researchers.

Apart from NIH, the National Institutes of Standards and Technology and The National Science Foundation (NSF) are some others who stand to gain from this bill. The U.S. Food and Drug Administration (FDA) has also managed a $217 million increase in its 2014 budget over the previous year.

However, things are not at all cheery for the Centers for Medicare and Medicaid Services (CMS). While the bill includes $3.7 billion for the CMS, this was $195 million less than what was enacted in the previous fiscal.

Despite the overall negative sentiment, it might be a good idea to bet on a handful of medical device stocks that are likely to beat earnings estimates this quarter. An earnings beat will translate into rapid price appreciation for these stocks. This will give you above-average return as you are getting these stocks at a cheaper price due to the overall negative sentiment in the sector. 

How to Choose the Best?

With the existence of a number of industry players, finding the right stocks that have the potential to beat earnings estimates could appear to be a difficult task, but our proprietary methodology makes it fairly simple for you. You could narrow down the list of choices by looking at stocks that have the combination of a favorable Zacks Rank – Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) – and a positive Zacks Earnings ESP.

Earnings ESP is our proprietary methodology for determining which stocks have the best chance to surprise with their next earnings announcement. It shows the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate.

Our research shows that for stocks with this combination, the chance of positive earnings surprise is as high as 70%.

3 Stocks Set to Beat Earnings

Here are three medical stocks that have the right combination of elements to post an earnings beat this quarter:

Henry Schein Inc. (Nasdaq:HSIC-Free Report), based in Melville, NY,  is a leading distributor of health care products and services to office-based dental, medical and animal health practitioners, dental laboratories, government as well as institutional health care clinics and other alternate-care sites across the globe. The stock carries a Zacks Rank #1 with an Earnings ESP of +1.44%. The Zacks Consensus Estimate for earnings in the fourth quarter is pegged at $1.39.

Henry Schein delivered positive earnings surprises in three of the last four quarters with an average beat of 1.21%. Based on favorable market dynamics, the company's animal health and dental business is expected to deliver strong sales. Over the past several quarters, the company has demonstrated consistent growth via both organic and inorganic means.

Henry Schein will be reporting fourth-quarter 2013 earnings on Feb 11.

Cyberonics Inc. (Nasdaq:CYBX-Free Report) is a Zacks Rank #2 stock and has an Earnings ESP of +4.08%. The Zacks Consensus Estimate for the fourth quarter is 49 cents.

Cyberonics is a medical technology company with core expertise in neuromodulation. The company provides Vagus Nerve Stimulation (VNS) therapy for the treatment of refractory epilepsy and treatment-resistant depression (TRD). The company has delivered positive earnings surprises in the trailing four quarter.

Cyberonics continued to gain from a solid foothold in the epilepsy market and strong overseas business. Further penetration in the still untapped epilepsy market should also catalyze growth. The company's lucrative pipeline is another upside.

Cyberonics will be reporting fourth-quarter fiscal 2014 earnings on Feb 20.

DexCom, Inc. (Nasdaq:DXCM-Free Report), based in San Diego, Calif., is a Zacks Rank #2 (Buy) stock with an Earnings ESP of +14.29%. The Zacks Consensus Estimate for the fourth quarter is pegged at a loss of 7 cents.

DexCom, Inc. is a medical device company focused on the design, development and commercialization of continuous glucose monitoring systems. These are designed particularly for ambulatory use for people with diabetes and by healthcare providers for the treatment of diabetic and non-diabetic patients. The company has delivered positive earnings surprises in the training four quarters with an average beat of 17.34%.

The company's G4 Platinum is expected to do well in the fourth quarter. Increased awareness of the need for continuous glucose monitoring, new products and data supporting blood glucose monitoring should help drive sales.

Dexcom will be reporting fourth-quarter 2013 earnings on Feb 20.

The Bottom Line

In order to sustain the current precarious condition within the MedTech space, key players are trying every possible means to change their business models and cost structures. They are undertaking various restructuring initiatives to counter costs associated with the implementation of the new tax. This renewed focus could result in continued mergers and acquisitions (M&A) and expansion to emerging markets going forward. They are also trying to divest their nonpaying operations in order to weather the tax burden. Nevertheless, you could safely rely on the industry outperformers that still possess earnings strength.

Will Regeneron (REGN) Disappoint in Q4?

Regeneron Pharmaceuticals, Inc. (Nasdaq:REGN-Free Report) is set to report its fourth quarter 2013 results on Feb 11 before the opening bell. Last quarter it posted a +104.04% surprise. Let's see how things are shaping up for this announcement.

Growth Factors this Quarter

Regeneron's third quarter 2013 earnings breezed past the Zacks Consensus Estimate primarily on the back of strong sales of its eye drug, Eylea. We note that Regeneron has co-developed Eylea with the HealthCare unit of Bayer (OTC:BAYRY-Free Report). Eylea is expected to continue performing well in the coming quarters as well. Regeneron also managed to post positive earnings surprises in all of the last four quarters, with an average beat of 49.95%.

However, a number of negatives are likely to mar the overall results of Regeneron in the fourth quarter. Results will be affected by higher research and development expenses as Regeneron continues to develop its pipeline. Moreover, selling, general and administrative costs will increase due to costs associated with the marketing of Eylea. In addition to that, Regeneron's other two marketed drugs, Arcalyst and Zaltrap, are operating in highly competitive markets and will contribute meagerly to fourth quarter results.

Earnings Whispers?

Our proven model does not conclusively show that Regeneron is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.

Zacks ESP: The Earnings ESP for Regeneron is 0.00% since the Most Accurate Estimate stands at 99 cents, in line with the Zacks Consensus Estimate.

Zacks Rank #4 (Sell): Regeneron's Zacks Rank #4 makes matters worse. We caution against stocks with Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions, as is the case here.

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today.

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros.  In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros.

Get the full Report on HSIC - FREE

Get the full Report on CYBX - FREE

Get the full Report on DXCM - FREE

Get the full Report on REGN - FREE

Get the full Report on BAYRY - FREE

Follow us on Twitter: http://twitter.com/zacksresearch

Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

Media Contact

Zacks Investment Research

800-767-3771 ext. 9339

[email protected]

http://www.zacks.com

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

SOURCE Zacks Investment Research, Inc.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
ChatOps is an emerging topic that has led to the wide availability of integrations between group chat and various other tools/platforms. Currently, HipChat is an extremely powerful collaboration platform due to the various ChatOps integrations that are available. However, DevOps automation can involve orchestration and complex workflows. In his session at @DevOpsSummit at 20th Cloud Expo, Himanshu Chhetri, CTO at Addteq, will cover practical examples and use cases such as self-provisioning infra...
Blockchain. A day doesn’t seem to go by without seeing articles and discussions about the technology. According to PwC executive Seamus Cushley, approximately $1.4B has been invested in blockchain just last year. In Gartner’s recent hype cycle for emerging technologies, blockchain is approaching the peak. It is considered by Gartner as one of the ‘Key platform-enabling technologies to track.’ While there is a lot of ‘hype vs reality’ discussions going on, there is no arguing that blockchain is b...
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, provided an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life settle...
The cloud era has reached the stage where it is no longer a question of whether a company should migrate, but when. Enterprises have embraced the outsourcing of where their various applications are stored and who manages them, saving significant investment along the way. Plus, the cloud has become a defining competitive edge. Companies that fail to successfully adapt risk failure. The media, of course, continues to extol the virtues of the cloud, including how easy it is to get there. Migrating...
No hype cycles or predictions of a gazillion things here. IoT is here. You get it. You know your business and have great ideas for a business transformation strategy. What comes next? Time to make it happen. In his session at @ThingsExpo, Jay Mason, an Associate Partner of Analytics, IoT & Cybersecurity at M&S Consulting, presented a step-by-step plan to develop your technology implementation strategy. He also discussed the evaluation of communication standards and IoT messaging protocols, data...
You know you need the cloud, but you’re hesitant to simply dump everything at Amazon since you know that not all workloads are suitable for cloud. You know that you want the kind of ease of use and scalability that you get with public cloud, but your applications are architected in a way that makes the public cloud a non-starter. You’re looking at private cloud solutions based on hyperconverged infrastructure, but you’re concerned with the limits inherent in those technologies.
Coca-Cola’s Google powered digital signage system lays the groundwork for a more valuable connection between Coke and its customers. Digital signs pair software with high-resolution displays so that a message can be changed instantly based on what the operator wants to communicate or sell. In their Day 3 Keynote at 21st Cloud Expo, Greg Chambers, Global Group Director, Digital Innovation, Coca-Cola, and Vidya Nagarajan, a Senior Product Manager at Google, discussed how from store operations and ...
In his session at 21st Cloud Expo, Raju Shreewastava, founder of Big Data Trunk, provided a fun and simple way to introduce Machine Leaning to anyone and everyone. He solved a machine learning problem and demonstrated an easy way to be able to do machine learning without even coding. Raju Shreewastava is the founder of Big Data Trunk (www.BigDataTrunk.com), a Big Data Training and consulting firm with offices in the United States. He previously led the data warehouse/business intelligence and B...
"IBM is really all in on blockchain. We take a look at sort of the history of blockchain ledger technologies. It started out with bitcoin, Ethereum, and IBM evaluated these particular blockchain technologies and found they were anonymous and permissionless and that many companies were looking for permissioned blockchain," stated René Bostic, Technical VP of the IBM Cloud Unit in North America, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Conventi...
A strange thing is happening along the way to the Internet of Things, namely far too many devices to work with and manage. It has become clear that we'll need much higher efficiency user experiences that can allow us to more easily and scalably work with the thousands of devices that will soon be in each of our lives. Enter the conversational interface revolution, combining bots we can literally talk with, gesture to, and even direct with our thoughts, with embedded artificial intelligence, whic...
The need for greater agility and scalability necessitated the digital transformation in the form of following equation: monolithic to microservices to serverless architecture (FaaS). To keep up with the cut-throat competition, the organisations need to update their technology stack to make software development their differentiating factor. Thus microservices architecture emerged as a potential method to provide development teams with greater flexibility and other advantages, such as the abili...
Product connectivity goes hand and hand these days with increased use of personal data. New IoT devices are becoming more personalized than ever before. In his session at 22nd Cloud Expo | DXWorld Expo, Nicolas Fierro, CEO of MIMIR Blockchain Solutions, will discuss how in order to protect your data and privacy, IoT applications need to embrace Blockchain technology for a new level of product security never before seen - or needed.
Leading companies, from the Global Fortune 500 to the smallest companies, are adopting hybrid cloud as the path to business advantage. Hybrid cloud depends on cloud services and on-premises infrastructure working in unison. Successful implementations require new levels of data mobility, enabled by an automated and seamless flow across on-premises and cloud resources. In his general session at 21st Cloud Expo, Greg Tevis, an IBM Storage Software Technical Strategist and Customer Solution Architec...
The use of containers by developers -- and now increasingly IT operators -- has grown from infatuation to deep and abiding love. But as with any long-term affair, the honeymoon soon leads to needing to live well together ... and maybe even getting some relationship help along the way. And so it goes with container orchestration and automation solutions, which are rapidly emerging as the means to maintain the bliss between rapid container adoption and broad container use among multiple cloud host...
Blockchain is a shared, secure record of exchange that establishes trust, accountability and transparency across business networks. Supported by the Linux Foundation's open source, open-standards based Hyperledger Project, Blockchain has the potential to improve regulatory compliance, reduce cost as well as advance trade. Are you curious about how Blockchain is built for business? In her session at 21st Cloud Expo, René Bostic, Technical VP of the IBM Cloud Unit in North America, discussed the b...