), a global provider of medical devices used in critical care and
surgery, recently won a new agreement with HealthTrust, a
healthcare group purchasing organization (GPO). The agreement
will cover the company's line of ligation products including
Horizon, Auto Endo and Hem-o-lok offerings under the
well-regarded Weck brand.
The HealthTrust agreement has been effective from Dec 1, 2012.
The group purchasing agreement will pool buyers for Teleflex by
gaining access to HealthTrust's 1,400 hospital members.
Earlier this month, Teleflex won two new three-year agreements
for its portfolio of surgical instruments with GPO Premier. The
agreements will be effective from Feb 1, 2013 through Jan 31,
All these agreements should enhance Teleflex's supply chain
efficiency and help it achieve supply continuum. The agreements
can thereby be expected to augment the company's top-line on the
back of volume growth. Further, Teleflex should be able to gain
competitive edge over its peers.
The group purchasing agreements are expected to decrease overhead
costs for prospective buyers. Moreover, the contagion of economic
problems in Europe has increased the importance of GPO. Notably,
Teleflex is already facing rebate in output prices in certain
European nations due to GPO. The company has been facing
increasing input costs over the past few quarters. Despite a
probable hike in costs, we believe that Teleflex might not be
able to increase the prices of its products under the group
purchasing agreements, which might hamper its profitability.
We remain on the sidelines for Teleflex as well as its peers
C. R. Bard
), each with a Zacks Rank #3 (Hold). However, we look forward to
), which carries a Zacks Rank #2 (Buy).
BARD C R INC (BCR): Free Stock Analysis
CAREFUSION CORP (CFN): Free Stock Analysis
COVIDIEN PLC (COV): Free Stock Analysis
TELEFLEX INC (TFX): Free Stock Analysis
To read this article on Zacks.com click here.