We recently reiterated our Neutral recommendation on
), a major operator of single-specialty practice-based ambulatory
surgery centers (ASCs). While we hold a favorable view regarding
the company's double-digit sales growth in the past several
quarters on the back of new centers and improved same-center
sales, concerns linger around challenges like reimbursement
issues and economic uncertainty. The stock currently carries a
Zacks Rank #3 (Hold).
Why at Neutral?
AmSurg's fourth-quarter earnings per share (EPS) of 49 cents
were up 6.5% year over year. Although it missed the Zacks
Consensus Estimate of 2 cents, EPS remained within the company's
guidance range. Revenues increased 10% to $244.2 million.
AmSurg has been able to deliver satisfactory progress with
several quarters of double-digit sales growth. In spite of the
impact of Hurricane Sandy, fourth-quarter 2012 revenues were
encouraging due to an increase in the number of multi-specialty
centers, addition of several new centers through acquisitions and
the development of additional ASCs. We are also encouraged to
note that during the quarter, improved volume-pricing mix led to
a 3% increase in same-store revenue, which was preceded by 2%
growth in the third quarter.This was the 7
consecutive quarter of increase.
Moreover, we expect AmSurg to go ahead with its acquisition
pipeline, supported by a strong cash position.Government agencies
have undertaken initiatives to curtail healthcare expenditure,
resulting in a shifttoward ASCs from admission to traditional
However, AmSurg is encountering several challenges such as
reimbursement issues and economic uncertainty. All of these
collectively result in deferring elective procedures, with a
decline in doctor visits by patients, which leads to lower
Other Stocks to Consider
While we prefer to remain on the sidelines on Thermo Fisher,
other medical device stocks worth a look are
Medical Action Industries Inc.
). All these stocks carry a Zacks Rank #1 (Strong Buy).
AMSURG CORP (AMSG): Free Stock Analysis
CYTOKINETCS INC (CYTK): Free Stock Analysis
GIVEN IMAGING (GIVN): Free Stock Analysis
MEDICAL ACTION (MDCI): Free Stock Analysis
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