International health care products major,
) launched 3 new hernia care offerings at the American Hernia
Society's (AHS) annual meeting. The devices namely ProGrip
Laparoscopic Self-Fixating Mesh, Parietex Composite Ventral Patch
and AbsorbaTack 30X Absorbable Fixation Device are utilized in
laparoscopic inguinal, ventral and umbilical hernia repair,
Strain on the abdominal muscles can lead to weakening, bulge
or tear of the outer layers of the abdominal wall, resulting in
the development of hernia. According to a research by Truven
Health Analytics, about 600,000 inguinal and 700,000 ventral
hernia surgeries are performed annually in the U.S.
Covidien has an impressive history of developing and
manufacturing high-quality products in a cost-effective manner.
The new products are a part of the soft tissue repair product
line under the core Medical Device segment. Sales of Soft Tissue
Repair products grew 3% to $225 million in the first quarter of
fiscal 2013 on the back of higher suture, mesh and mechanical
All three products have been cleared by the Food and Drug
Administration (FDA) and are available commercially in the U.S.
Given Covidien's leading position in the hernia care market, we
believe that these latest offerings should help the business to
grow and achieve its sales target of 5%-8% for fiscal 2013.
Covidien currently carries a Zacks Rank #3 (Hold). The company
is positioned well to achieve its long-term revenues and earnings
growth targets based on its attractive fundamentals, strategic
R&D investment, effective execution, new product cycle and
expansion into emerging markets. It is also enhancing
shareholders' value through dividends and share repurchases,
leveraging healthy free cash flow and strong earnings.
However, Covidien faces stiff competition and remains exposed
to pricing and utilization headwinds, along with acquisition
risks. We also remain concerned about the tepid U.S. health
services industry and the soft European economy. Also, foreign
exchange translation is expected to dampen growth.
While we remain on the sidelines regarding Covidien, companies
) , carrying a Zacks Rank #1 (Strong Buy), as well as
), which carry a Zacks Rank #2 (Buy), are expected to do well in
the medical industry.
CAREFUSION CORP (CFN): Free Stock Analysis
COVIDIEN PLC (COV): Free Stock Analysis
HANGER ORTHOPED (HGR): Free Stock Analysis
NUVASIVE INC (NUVA): Free Stock Analysis
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