PerkinElmer, Inc. (
PerkinElmer Inc. isn't a company name that rolls off the tongue
of the average American. But their products, services and
technologies have been well known in the scientific community for
70 years and most likely have crossed your path at some point, you
may have just not known it…
Perhaps their diverse business, which is focused on the
periphery of health and human sciences or the lack of just one
strong public brand, keeps them hidden from the average
investor. This quiet but strong stock might be worth a look
as preventive care, environmental health consciousness and overall
safety awareness increases globally.
Company Description & Developments
PerkinElmer is an international company with operations in 150
countries and 7,000 employees. They are focused on improving
the health and safety of people and the environment.
PerkinElmer's mission ranges from enabling discovery of more
effective diagnostics and therapies to making sure that our food,
water, consumer products and the places where we live and work are
safe from contaminants. They currently hold over 2,900 related
PerkinElmer is divided into two segments: Human Health and
The human health division develops technologies that touch over
31 million births and pregnancies a year with over 300 million
screened to date. Their pre- and neo-natal screening
solutions are widespread, and according to the company save over 50
babies' lives each day.
In addition, they are the world's number one cellular imaging
technology company and leading supplier of amorphous silicon
digital x-ray detectors used to preserve healthy tissue in cancer
patients. They are also the world's leading provider of
several solutions for digital x-ray systems and an integral part of
enabling research into over 75% of drug pathways for GPCR and
If all this is Greek to you, you're not alone. Think about
PKI as an indispensible catalyst and technology/solutions provider
that helps turn a medical discovery into a viable cure or
treatment. The company simply strives to improve the quality
of life for the human race by filling voids and improving various
On the environmental side they produce many environmental
monitoring technologies that help keep our planet clean. PKI also
provides analytical techniques for several environmentally related
industries including Inorganic, Molecular Spectroscopy and Thermal
Analysis and Gas Chromatography.
Their instruments and services are essential components for
efficient, renewable energy and clean air and water.
PKI is a mid-cap ($3.08 billion) company that is trading at about
13.5 times forward (expectations for next quarter) earnings.
PKI became a Zacks Rank #1 Strong Buy on February 7th, 2011.
The company reported a quarterly sales increase of 19% at
their last earnings report and saw a 51% rise in EPS for the same
period. Annual sales were up 15% compared to (fiscal) FY2010
with total sales of roughly 1.92 billion in FY2011. PKI
earnings dropped from $3.25 in FY2010 to $0.06 in FY2011. The
results for the latest quarter included a $0.40 per share charge
related to the recent acquisition of Caliper Life Sciences,
pension liabilities of divested businesses and $0.61 per share of
tax charges related to Caliper acquisition.
PKI is expected to earn $2.02 in FY2012 according to the Zacks
Consensus Estimate. The company guided 2012 earnings higher
than expectations at their last report on February 2nd.
PerkinElmer reported a loss for Q42011, but earnings and forecasts
were better than expected. Revenues for the quarter grew 15 percent
to $540.19 million from $469.97 million in the same quarter last
During the year PKI saw a huge jump in general and
administrative expenses, most likely due to their
acquisition. They did see growth in both divisions with human
health up 20% and environmental up 11% for the year. PerkinElmer
has surprised analysts to the upside for the past 4 quarters an
average of 11.26%.
Expectations are for PKI to generate $0.41 in income this
quarter. Of the 9 analysts who cover PKI, the consensus is
for the company to grow earnings by 10% in the current year
(FY2012) and roughly 13% in FY2013.
In terms of the magnitude of analyst estimate trends, we are
seeing all of the consensus estimates higher than they were 90 days
ago for the current and next quarters, as well as for FY2012 and
PerkinElmer reports Q12012 results on May 10th.
Market Performance & Technicals
Over the past three months, PKI's charts would be the textbook
definition of momentum. Unfortunately, they would also be the
textbook definition of overbought, having risen 59% in that
On the surface, it looks like a scary trade to make given the
non-stop bullish action the shares have seen, but given the
reasonable earnings multiple and strong fundamental story it might
not be such a bad deal. The shares are still about $2 away
from their 52-week highs of almost $59 made back in mid-2011.
The company's strong 2012 guidance should also add a bit of comfort
to the trade. A breakout above that level could give the
stock another boost.
From a technical standpoint, there is support down at the $23
level which coincides with some tops made back in August and
September of 2011, as well as the 50- and 200-day moving averages
which are crossed right around that level. The 50-day stands
at $23.13 and the 200 at $22.70.
PKI has matched the S&P 500's performance in the past year
but outpaced it by over 30% in the past 3 months with its meteoric
rise. PKI has maintained its momentum in the past couple
weeks, leading the index by about 10%.
With a beta of .96 you can typically expect the stock to move in
relation to the broad market with the same volatility. It was
interesting to note that PKI moved right at the same pace as the
S&P over the past year, but it was much more volatile and
seemed disconnected at times.
The story remains positive for PKI -- that is, if the market
doesn't steal the jam out of its donut.
Jared A Levy is the Momentum Stock Strategist for Zacks.com. He
is also the Editor in charge of the market-beating
Zacks Whisper Trader Service.
PERKINELMER INC (
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