We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Neogen (NEOG) Acquires Brazilian Private Company Rogama
Read MoreHide Full Article
Lansing, MA-based leading global developer of products for food and animal safety, Neogen Corporation (NEOG - Free Report) announced that it has acquired Brazil-based Rogama Indústria e Comércio Ltda, which was a private company that developed and manufactured rodenticides and insecticides.
Over the past six months, Neogen has traded below the Zacks categorized Medical Products sub-industry. The stock currently represents a strong return of 24.92% as against the sub-industry’s decline of 4.77%. Year to date, the company represented a gain of 17.78%, while the S&P 500 rose 11.00%.
Notably, an expected long-term earnings growth rate of 16.67% indicates the stock’s solid potential for further price appreciation in the near future. However, the current year estimate trend for the stock is dismal, with one estimate going down in the past two months and no upward revision. Neogen’s current year estimates have inched down to $1.12 over the past two months. Coming back to the deal, the acquisition strengthens Neogen’s biosecurity business which was initiated in 2003 with the acquisition of rodenticides, cleaners and disinfectants from ConAgra.
Rogama provides pest control products to Brazil's agronomic, professional and retail markets. The company is also a major supplier to public health agencies, including a long-term partnership with the Pan American Health Organization. Its annual revenues were approximately $8 million.
Our Take
The acquisition will strengthen Neogen’s rodenticide business and fortify its footprint overseas. We believe that expanding its global footprint and focusing on China are the key long-term catalysts for the company. Meanwhile, the global rodenticides market is projected to reach around $1.23 billion by 2022, multiplying at a CAGR of around 3.76% (Markets And Markets).
However, an unfavorable foreign exchange rate will continue to raise concern in the near term. Operating margin is also expected to remain under pressure owing to adverse product mix as well as impact of acquisitions, apart from the foreign exchange woes.
Zacks Rank & Key Picks
Currently, Neogen carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader medical sector include Addus HomeCare Corporation (ADUS - Free Report) , LHC Group, Inc. and IDEXX Laboratories, Inc. (IDXX - Free Report) . Both Addus HomeCare and IDEXX Laboratories sport a Zacks Rank #1 (Strong Buy), while LHC Group carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Addus HomeCare has a long-term expected earnings growth rate of approximately 15%. Notably, the stock represents an impressive one-year return of 50%.
LHC Group has a long-term expected earnings growth rate of 15%. The company has returned almost 17.6% in the last three months.
IDEXX Laboratories has an expected earnings growth of almost 15%. The company posted a promising year-to-date return of almost 64%.
Zacks’ Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? As of early December, the 2016 Top 10 produced 5 double-digit winners including oil and natural gas giant Pioneer Natural Resources which racked up a stellar +50% gain. The new list is painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. Be among the very first to see it>>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Neogen (NEOG) Acquires Brazilian Private Company Rogama
Lansing, MA-based leading global developer of products for food and animal safety, Neogen Corporation (NEOG - Free Report) announced that it has acquired Brazil-based Rogama Indústria e Comércio Ltda, which was a private company that developed and manufactured rodenticides and insecticides.
Over the past six months, Neogen has traded below the Zacks categorized Medical Products sub-industry. The stock currently represents a strong return of 24.92% as against the sub-industry’s decline of 4.77%. Year to date, the company represented a gain of 17.78%, while the S&P 500 rose 11.00%.
Notably, an expected long-term earnings growth rate of 16.67% indicates the stock’s solid potential for further price appreciation in the near future. However, the current year estimate trend for the stock is dismal, with one estimate going down in the past two months and no upward revision. Neogen’s current year estimates have inched down to $1.12 over the past two months.
Coming back to the deal, the acquisition strengthens Neogen’s biosecurity business which was initiated in 2003 with the acquisition of rodenticides, cleaners and disinfectants from ConAgra.
Rogama provides pest control products to Brazil's agronomic, professional and retail markets. The company is also a major supplier to public health agencies, including a long-term partnership with the Pan American Health Organization. Its annual revenues were approximately $8 million.
Our Take
The acquisition will strengthen Neogen’s rodenticide business and fortify its footprint overseas. We believe that expanding its global footprint and focusing on China are the key long-term catalysts for the company. Meanwhile, the global rodenticides market is projected to reach around $1.23 billion by 2022, multiplying at a CAGR of around 3.76% (Markets And Markets).
However, an unfavorable foreign exchange rate will continue to raise concern in the near term. Operating margin is also expected to remain under pressure owing to adverse product mix as well as impact of acquisitions, apart from the foreign exchange woes.
Zacks Rank & Key Picks
Currently, Neogen carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader medical sector include Addus HomeCare Corporation (ADUS - Free Report) , LHC Group, Inc. and IDEXX Laboratories, Inc. (IDXX - Free Report) . Both Addus HomeCare and IDEXX Laboratories sport a Zacks Rank #1 (Strong Buy), while LHC Group carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Addus HomeCare has a long-term expected earnings growth rate of approximately 15%. Notably, the stock represents an impressive one-year return of 50%.
LHC Group has a long-term expected earnings growth rate of 15%. The company has returned almost 17.6% in the last three months.
IDEXX Laboratories has an expected earnings growth of almost 15%. The company posted a promising year-to-date return of almost 64%.
Zacks’ Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? As of early December, the 2016 Top 10 produced 5 double-digit winners including oil and natural gas giant Pioneer Natural Resources which racked up a stellar +50% gain. The new list is painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. Be among the very first to see it>>