Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

On Nov 27, we retained Symmetry Medical, Inc. (SMA - Analyst Report) at Neutral, following its mixed third-quarter 2013 results. Although the company is facing several headwinds in the near-term, the company has considerable long-term growth opportunities.

Why the Retention?

On Oct 31, SMA posted third-quarter adjusted earnings of 7 cents, beating the Zacks Consensus Estimate by 3 cents. However, earnings were significantly lower than the year-ago adjusted earnings of 16 cents per share. The decline resulted from soft revenues as well as various internal issues.

Revenues declined 3% year over year to $98.0 million, falling short of the Zacks Consensus Estimate of $101 million. Weak sales in both the Original Equipment Manufacturer (OEM) Solutions and the Symmetry Surgical businesses led to the downfall.

The company’s earnings have failed to beat the Zacks Consensus Estimates in 2 out of the last 4 quarters with an average negative surprise of 10.16%. Following the earnings release, the Zacks Consensus Estimate for 2013 increased 8% to 27 cents per share but the same for 2014 inched down 1.9% to 53 cents.

We believe that long-term prospects of Symmetry are still intact. New products, harmonized sales force and eventual accretion from acquired businesses should bolster the company’s growth going forward.

However, multiple internal as well as external issues led to a sudden sequential drop in revenues from the core OEM business. Moreover, the high-margin Surgical business continues to face headwinds from integration of the Codman business. All these factors along with tempered gross margin have led management to significantly lower its outlook for 2013.

Other Stocks to Consider

Investors interested in the medical products industry may consider stocks like NuVasive, Inc. (NUVA - Snapshot Report), Hill-Rom Holdings, Inc. (HRC - Snapshot Report) and Boston Scientific Corporation (BSX - Analyst Report). While NUVA and HRC carries a Zacks Rank #1 (Strong Buy), BSX carries a Zacks Rank #2 (Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GROUP DXYN 15.84 +7.90%
BOFL HOLDING BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%