We recently reiterated our Neutral recommendation on
AmSurg Corporation
(
AMSG
), 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
th
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
hospitals.
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
surgical volume.
Other Stocks to Consider
While we prefer to remain on the sidelines on Thermo Fisher,
other medical device stocks worth a look are
Given Imaging
(
GIVN
),
Medical Action Industries Inc.
(
MDCI
) and
Cytokinetics Incorporated
(
CYTK
). All these stocks carry a Zacks Rank #1 (Strong Buy).
AMSURG CORP (AMSG): Free Stock Analysis
Report
CYTOKINETCS INC (CYTK): Free Stock Analysis
Report
GIVEN IMAGING (GIVN): Free Stock Analysis
Report
MEDICAL ACTION (MDCI): Free Stock Analysis
Report
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