On December 6, 2012, Zacks Investment Research upgraded
Merit Medical Systems Inc.
) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Merit Medical has watched most of its earnings estimates move
higher on the back of solid third quarter performance and
accretive acquisitions. Moreover, this provider of disposable
medical devices has delivered positive earnings surprises in 3 of
the last 4 quarters with an average beat of 10.6%. The long-term
expected earnings growth rate for this stock is 11.6%.
On October 25, 2012, Merit Medical reported third quarter
adjusted earnings per share of 20 cents, beating the Zacks
Consensus Estimate by 17.6% and the year-ago earnings by 11.1%.
Despite a seasonal slowdown, the company witnessed growth across
all operating platforms. In addition, Merit Medical reported
significant margin expansion on the heels of higher production
efficiency and favorable product mix.
Moreover, Merit Medical resorts to inorganic growth to expand its
operations. On December 20, 2012, the company closed the
acquisition of Thomas Medical Products from GE Healthcare, a
). This was Merit Medical's second acquisition in two months, the
first being the acquisition of Medigroup's assets in November.
The buyouts are expected to be immediately accretive to the
company's adjusted net earnings.
Merit Medical pursues an aggressive strategy of new product
development. It recently gained the clearance from the U.S. Food
and Drug Administration (FDA) for its One Snare Endovascular
Snare System. Moving forward, the company's three-pronged
strategy of innovation, selective acquisitions and domestic
expansion is likely to reap positive results in the future as
While the Zacks Consensus Estimate for 2012 stood at 76 cents
over the last 30 days, the Zacks Consensus Estimate for 2013 rose
3.5% over the same time frame to 89 cents.
Other Stocks to Consider
Other notable medical devices stocks with favorable Zacks Rank
Given Imaging Ltd.
), each carrying a Zacks Rank #1 (Strong Buy).
GENL ELECTRIC (GE): Free Stock Analysis
GIVEN IMAGING (GIVN): Free Stock Analysis
MERIT MEDICAL (MMSI): Free Stock Analysis
THORATEC CORP (THOR): Free Stock Analysis
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