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On Oct 1, we reiterate our Neutral recommendation on AngioDynamics Inc. (ANGO - Analyst Report) following its fourth-quarter results. Although the company was able to beat bottom-line estimates in the quarter, ongoing challenges in the medical device industry keep us on the sidelines. 
 
Why the Retention?
 
On Jul 11, ANGO reported adjusted earnings of 7 cents per share for the fourth quarter of fiscal 2013, which beat the Zacks Consensus Estimate of 5 cents. Earnings were more than doubled from the year-ago quarter earnings of 3 cents.
 
Revenues declined 2% to $90.0 million on a pro forma basis but exceeded the Zacks Consensus Estimate of $89 million. Pro forma results include the Navilyst acquisition and exclude the LC Beads sales. Revenues were lower due to difficult year-over-year comparisons. 
 
AngioDynamics’ earnings beat the Zacks Consensus Estimate in all of the last 4 quarters, with an impressive average surprise of 33.56%. However, following the earnings release, the Zacks Consensus Estimate for both fiscal 2014 and 2015 remained unchanged at 33 cents and 43 cents per share, respectively, over the last 60 days. Currently, the stock has a Zacks Rank #3 (Hold).
 
ANGO is positioned for long-term growth driven by its focus on interventional peripheral products. New offerings from recent acquisitions as well as from the organic business are expected to boost revenues in the near future. Management is upbeat with the increased adoption of the company’s latest offering, AngioVac.
 
However, soft sales in the U.S. and pressure on the Vascular Access product category are a cause of concern. We are cognizant regarding the ongoing macroeconomic difficulties in the medical device industry. Further, we remain wary about intense competition, ongoing integration, and pricing/volume headwinds.  
 
Other Stocks to Consider
 
While we remain on the sidelines about AngioDynamics, medical instruments companies that are performing well and are worth considering include Luminex (LMNX - Analyst Report), Masimo (MASI - Analyst Report) and Given Imaging . All these stocks carry a Zacks Rank #2 (Buy).

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