|By PR Newswire||
|February 11, 2014 09:30 AM EST||
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).
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 The medical devices spending cut, if not repealed, may take a grave turn in 2014, leading to serious consequences like delaying progress in medical breakthroughs, deterioration in job creation, and tempering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 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.
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.
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.
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.
Zacks Investment Research
800-767-3771 ext. 9339
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.
The IoT is changing the way enterprises conduct business. In his session at @ThingsExpo, Eric Hoffman, Vice President at EastBanc Technologies, discussed how businesses can gain an edge over competitors by empowering consumers to take control through IoT. He cited examples such as a Washington, D.C.-based sports club that leveraged IoT and the cloud to develop a comprehensive booking system. He also highlighted how IoT can revitalize and restore outdated business models, making them profitable ...
Jul. 25, 2016 08:30 PM EDT Reads: 1,923
StackIQ has announced the release of Stacki 3.2. Stacki is an easy-to-use Linux server provisioning tool. Stacki 3.2 delivers new capabilities that simplify the automation and integration of site-specific requirements. StackIQ is the commercial entity behind this open source bare metal provisioning tool. Since the release of Stacki in June of 2015, the Stacki core team has been focused on making the Community Edition meet the needs of members of the community, adding features and value, while ...
Jul. 25, 2016 08:15 PM EDT Reads: 208
The cloud competition for database hosts is fierce. How do you evaluate a cloud provider for your database platform? In his session at 18th Cloud Expo, Chris Presley, a Solutions Architect at Pythian, gave users a checklist of considerations when choosing a provider. Chris Presley is a Solutions Architect at Pythian. He loves order – making him a premier Microsoft SQL Server expert. Not only has he programmed and administered SQL Server, but he has also shared his expertise and passion with b...
Jul. 25, 2016 08:00 PM EDT Reads: 1,896
With 15% of enterprises adopting a hybrid IT strategy, you need to set a plan to integrate hybrid cloud throughout your infrastructure. In his session at 18th Cloud Expo, Steven Dreher, Director of Solutions Architecture at Green House Data, discussed how to plan for shifting resource requirements, overcome challenges, and implement hybrid IT alongside your existing data center assets. Highlights included anticipating workload, cost and resource calculations, integrating services on both sides...
Jul. 25, 2016 08:00 PM EDT Reads: 1,962
Big Data engines are powering a lot of service businesses right now. Data is collected from users from wearable technologies, web behaviors, purchase behavior as well as several arbitrary data points we’d never think of. The demand for faster and bigger engines to crunch and serve up the data to services is growing exponentially. You see a LOT of correlation between “Cloud” and “Big Data” but on Big Data and “Hybrid,” where hybrid hosting is the sanest approach to the Big Data Infrastructure pro...
Jul. 25, 2016 07:30 PM EDT Reads: 1,879
"We are a well-established player in the application life cycle management market and we also have a very strong version control product," stated Flint Brenton, CEO of CollabNet,, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Jul. 25, 2016 07:15 PM EDT Reads: 1,792
We all know the latest numbers: Gartner, Inc. forecasts that 6.4 billion connected things will be in use worldwide in 2016, up 30 percent from last year, and will reach 20.8 billion by 2020. We're rapidly approaching a data production of 40 zettabytes a day – more than we can every physically store, and exabytes and yottabytes are just around the corner. For many that’s a good sign, as data has been proven to equal money – IF it’s ingested, integrated, and analyzed fast enough. Without real-ti...
Jul. 25, 2016 07:15 PM EDT Reads: 988
In his session at 18th Cloud Expo, Sagi Brody, Chief Technology Officer at Webair Internet Development Inc., and Logan Best, Infrastructure & Network Engineer at Webair, focused on real world deployments of DDoS mitigation strategies in every layer of the network. He gave an overview of methods to prevent these attacks and best practices on how to provide protection in complex cloud platforms. He also outlined what we have found in our experience managing and running thousands of Linux and Unix ...
Jul. 25, 2016 07:15 PM EDT Reads: 1,742
In his session at @DevOpsSummit at 19th Cloud Expo, Yoseph Reuveni, Director of Software Engineering at Jet.com, will discuss Jet.com's journey into containerizing Microsoft-based technologies like C# and F# into Docker. He will talk about lessons learned and challenges faced, the Mono framework tryout and how they deployed everything into Azure cloud. Yoseph Reuveni is a technology leader with unique experience developing and running high throughput (over 1M tps) distributed systems with extre...
Jul. 25, 2016 07:15 PM EDT Reads: 2,082
"Operations is sort of the maturation of cloud utilization and the move to the cloud," explained Steve Anderson, Product Manager for BMC’s Cloud Lifecycle Management, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Jul. 25, 2016 07:00 PM EDT Reads: 1,879
I wanted to gather all of my Internet of Things (IOT) blogs into a single blog (that I could later use with my University of San Francisco (USF) Big Data “MBA” course). However as I started to pull these blogs together, I realized that my IOT discussion lacked a vision; it lacked an end point towards which an organization could drive their IOT envisioning, proof of value, app dev, data engineering and data science efforts. And I think that the IOT end point is really quite simple…
Jul. 25, 2016 06:30 PM EDT Reads: 964
A critical component of any IoT project is what to do with all the data being generated. This data needs to be captured, processed, structured, and stored in a way to facilitate different kinds of queries. Traditional data warehouse and analytical systems are mature technologies that can be used to handle certain kinds of queries, but they are not always well suited to many problems, particularly when there is a need for real-time insights.
Jul. 25, 2016 06:15 PM EDT Reads: 1,743
UpGuard has become a member of the Center for Internet Security (CIS), and will continue to help businesses expand visibility into their cyber risk by providing hardening benchmarks to all customers. By incorporating these benchmarks, UpGuard's CSTAR solution builds on its lead in providing the most complete assessment of both internal and external cyber risk. CIS benchmarks are a widely accepted set of hardening guidelines that have been publicly available for years. Numerous solutions exist t...
Jul. 25, 2016 06:15 PM EDT Reads: 433
We're entering the post-smartphone era, where wearable gadgets from watches and fitness bands to glasses and health aids will power the next technological revolution. With mass adoption of wearable devices comes a new data ecosystem that must be protected. Wearables open new pathways that facilitate the tracking, sharing and storing of consumers’ personal health, location and daily activity data. Consumers have some idea of the data these devices capture, but most don’t realize how revealing and...
Jul. 25, 2016 06:00 PM EDT Reads: 2,077
"Software-defined storage is a big problem in this industry because so many people have different definitions as they see fit to use it," stated Peter McCallum, VP of Datacenter Solutions at FalconStor Software, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Jul. 25, 2016 06:00 PM EDT Reads: 1,422