|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 The medical devices spending cut, if not repealed, may take a grave turn in 2014, leading to serious consequences like delaying progress in medical breakthroughs, deterioration in job creation, and tempering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.
Information technology (IT) advances are transforming the way we innovate in business, thereby disrupting the old guard and their predictable status-quo. It’s creating global market turbulence. Industries are converging, and new opportunities and threats are emerging, like never before. So, how are savvy chief information officers (CIOs) leading this transition? Back in 2015, the IBM Institute for Business Value conducted a market study that included the findings from over 1,800 CIO interviews ...
Mar. 23, 2017 04:30 AM EDT Reads: 4,698
SYS-CON Events announced today that CA Technologies has been named “Platinum Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY, and the 21st International Cloud Expo®, which will take place October 31-November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. CA Technologies helps customers succeed in a future where every business – from apparel to energy – is being rewritten by software. From ...
Mar. 23, 2017 04:15 AM EDT Reads: 848
Web Real-Time Communication APIs have quickly revolutionized what browsers are capable of. In addition to video and audio streams, we can now bi-directionally send arbitrary data over WebRTC's PeerConnection Data Channels. With the advent of Progressive Web Apps and new hardware APIs such as WebBluetooh and WebUSB, we can finally enable users to stitch together the Internet of Things directly from their browsers while communicating privately and securely in a decentralized way.
Mar. 23, 2017 03:00 AM EDT Reads: 5,307
Niagara Networks exhibited at the 19th International Cloud Expo, which took place at the Santa Clara Convention Center in Santa Clara, CA, in November 2016. Niagara Networks offers the highest port-density systems, and the most complete Next-Generation Network Visibility systems including Network Packet Brokers, Bypass Switches, and Network TAPs.
Mar. 23, 2017 03:00 AM EDT Reads: 2,876
Extreme Computing is the ability to leverage highly performant infrastructure and software to accelerate Big Data, machine learning, HPC, and Enterprise applications. High IOPS Storage, low-latency networks, in-memory databases, GPUs and other parallel accelerators are being used to achieve faster results and help businesses make better decisions. In his session at 18th Cloud Expo, Michael O'Neill, Strategic Business Development at NVIDIA, focused on some of the unique ways extreme computing is...
Mar. 23, 2017 02:15 AM EDT Reads: 11,092
SYS-CON Events announced today that HTBase will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. HTBase (Gartner 2016 Cool Vendor) delivers a Composable IT infrastructure solution architected for agility and increased efficiency. It turns compute, storage, and fabric into fluid pools of resources that are easily composed and re-composed to meet each application’s needs. With HTBase, companies can quickly prov...
Mar. 23, 2017 02:15 AM EDT Reads: 2,244
SYS-CON Events announced today that Outlyer, a monitoring service for DevOps and operations teams, has been named “Bronze Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Outlyer is a monitoring service for DevOps and Operations teams running Cloud, SaaS, Microservices and IoT deployments. Designed for today's dynamic environments that need beyond cloud-scale monitoring, we make monitoring effortless so you ...
Mar. 23, 2017 02:00 AM EDT Reads: 3,644
SYS-CON Events announced today that MobiDev, a client-oriented software development company, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place June 6-8, 2017, at the Javits Center in New York City, NY, and the 21st International Cloud Expo®, which will take place October 31-November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. MobiDev is a software company that develops and delivers turn-key mobile apps, websites, web services, and complex softw...
Mar. 23, 2017 01:15 AM EDT Reads: 3,285
What if you could build a web application that could support true web-scale traffic without having to ever provision or manage a single server? Sounds magical, and it is! In his session at 20th Cloud Expo, Chris Munns, Senior Developer Advocate for Serverless Applications at Amazon Web Services, will show how to build a serverless website that scales automatically using services like AWS Lambda, Amazon API Gateway, and Amazon S3. We will review several frameworks that can help you build serverle...
Mar. 23, 2017 12:00 AM EDT Reads: 1,156
In his General Session at 17th Cloud Expo, Bruce Swann, Senior Product Marketing Manager for Adobe Campaign, explored the key ingredients of cross-channel marketing in a digital world. Learn how the Adobe Marketing Cloud can help marketers embrace opportunities for personalized, relevant and real-time customer engagement across offline (direct mail, point of sale, call center) and digital (email, website, SMS, mobile apps, social networks, connected objects).
Mar. 22, 2017 11:00 PM EDT Reads: 2,933
SYS-CON Events announced today that Hitrons Solutions will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Hitrons Solutions Inc. is distributor in the North American market for unique products and services of small and medium-size businesses, including cloud services and solutions, SEO marketing platforms, and mobile applications.
Mar. 22, 2017 10:15 PM EDT Reads: 3,244
With the introduction of IoT and Smart Living in every aspect of our lives, one question has become relevant: What are the security implications? To answer this, first we have to look and explore the security models of the technologies that IoT is founded upon. In his session at @ThingsExpo, Nevi Kaja, a Research Engineer at Ford Motor Company, will discuss some of the security challenges of the IoT infrastructure and relate how these aspects impact Smart Living. The material will be delivered i...
Mar. 22, 2017 10:15 PM EDT Reads: 1,702
For organizations that have amassed large sums of software complexity, taking a microservices approach is the first step toward DevOps and continuous improvement / development. Integrating system-level analysis with microservices makes it easier to change and add functionality to applications at any time without the increase of risk. Before you start big transformation projects or a cloud migration, make sure these changes won’t take down your entire organization.
Mar. 22, 2017 10:15 PM EDT Reads: 3,230
Historically, some banking activities such as trading have been relying heavily on analytics and cutting edge algorithmic tools. The coming of age of powerful data analytics solutions combined with the development of intelligent algorithms have created new opportunities for financial institutions. In his session at 20th Cloud Expo, Sebastien Meunier, Head of Digital for North America at Chappuis Halder & Co., will discuss how these tools can be leveraged to develop a lasting competitive advanta...
Mar. 22, 2017 09:30 PM EDT Reads: 2,302
Your homes and cars can be automated and self-serviced. Why can't your storage? From simply asking questions to analyze and troubleshoot your infrastructure, to provisioning storage with snapshots, recovery and replication, your wildest sci-fi dream has come true. In his session at @DevOpsSummit at 20th Cloud Expo, Dan Florea, Director of Product Management at Tintri, will provide a ChatOps demo where you can talk to your storage and manage it from anywhere, through Slack and similar services ...
Mar. 22, 2017 06:15 PM EDT Reads: 3,932