In order to uphold investor confidence, neuromodulation
) disclosed the approval of a new share repurchase program with
authorization to repurchase one million shares of the company's
outstanding common stock. However, the company did not specify
the exact timing and duration of the share repurchase program nor
did it reveal whether it will buyback shares in the open market
or via private negotiations.
The authorization is expected to commence after the completion
of the current buyback program that was initiated in November
2011. Following the second quarter of fiscal 2013, 360,000 shares
were left under the ongoing program.
The announcement reflects Cyberonics' confidence in its
fundamentals. The company had available cash of more than $118
million (up 22.6% year over year) until the most recent quarter
with no interest bearing debt on its balance sheet.
The stock is likely to appear more valuable on the back of the
recent news. Investors viewed the news in positive light as
reflected in the 4.47% increase in share price on Jan 28, 2013
(based on the adjusted closing price of $44.64).
With a positive earnings surprise in the last four quarters,
Cyberonics has an average beat of 16.74%. Moreover, the company's
expected long-term earnings growth rate is 19%. The share
repurchase program will allow Cyberonics to further leverage
earning power going forward.
As estimates move higher for the current as well as the next
fiscal for Cyberonics, the stock carries a Zacks Rank #1 (Strong
Buy). Also worth mentioning in this context is that the stock has
consistently outperformed the S&P 500 index as well as the
S&P Healthcare Equipment Index since May 2010.
Other Stocks to Consider
Besides Cyberonics, other stocks in the medical sector which
are expected to outperform are
), each carrying a Zacks Rank #1.
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CYBERONICS INC (CYBX): Free Stock Analysis
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