Techne Upped to Buy on Solid Fiscal Q4 & Accretive Buyouts - Analyst Blog

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On Aug 13, Zacks Investment Research upgraded Techne Corp. ( TECH ) a notch higher to a Zacks Rank #2 (Buy).

Why the Upgrade?

Techne reported impressive fiscal 2014-fourth-quarter (ended Jun 30, 2014) results on Aug 11, following which shares of the company continued their upward trend and climbed nearly 2.6% in the last one week.

Techne has been enjoying rising estimate revisions in the past 7 days with five upward revisions and no downward revision for fiscal 2015. The positive revisions led to a 2.8% rise in the Zacks Consensus Estimate to $3.66 per share for the year. Moreover, the company delivered positive earnings surprises in three of the last four quarters, with an average beat of 1.7%.

For fiscal 2016, four estimates moved up in the last 7 days with no downward revision, causing the Zacks Consensus Estimate to increase 4.8% to $3.90 per share.

Adjusted earnings per share scaled up 7.3% to 88 cents while revenues spiked 16.4% to $92.5 million in the fourth quarter. Earnings surpassed the Zacks Consensus Estimate by 3.5% while revenues were almost in line with the mark.

Revenues from the company's Biotechnology segment improved 4.1% to $76.7 million while revenues from the Clinical Controls segment posted an impressive rise of 177.2% to $15.8 million, primarily owing to the Bionostics acquisition.

Techne continues to broaden its product portfolio through a number of acquisitions and investments. At the beginning of this month, Techne completed the takeover of ProteinSimple - a California-based developer of proprietary systems and consumables for protein analysis - for $300 million in cash.

Last month, Techne also acquired Novus Biologicals - a Colorado-based supplier of developed antibodies and other reagents for life science research. The inclusion of Novus Biologicals is expected to strengthen Techne's antibody business and complement its expanding product portfolio, primarily sold to biomedical researchers and clinical research laboratories.

The company's other recent investments include a 100% ownership interest in Shanghai PrimeGene Bio-Tech Co. - a developer, manufacturer and distributor of recombinant proteins for research and diagnostic applications and a $10 million investment in CT-based CyVek Inc.

Techne's notable performance in the fourth quarter of fiscal 2014 coupled with increased M&A activity represents a potential upside for the company going forward.

Other Stocks to Consider

Some better-ranked medical instruments stocks include Alphatec Holdings, Inc. ( ATEC ), RTI Surgical Inc. ( RTIX ) and ERBA Diagnostics, Inc. ( ERB ). All these stocks sport a Zacks Rank #1 (Strong Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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