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DaVita Banks on Acquisitions, Escalating Expenses a Concern
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On Oct 6, we issued an updated research report on Denver, CO-based DaVita HealthCare Partners Inc. (DVA - Free Report) , a leading provider of dialysis services in the United States to patients suffering from chronic kidney failure, which is also known as end stage renal disease (ESRD).
Over the past six months, shares of the company have been trading below the broader industry. The stock has lost 12.4% compared with the broader industry’s 5.4% declined.
Acquiring dialysis centers and businesses that own and operate similar centers and other ancillary services has been DaVita’s preferred business strategy for long. This strategy has boosted the company’s top line to a large extent.
Of the major acquisitions in the recent past, The Everett Clinic, a medical group within the DaVita Medical Group division, acquired Totem Lake Family Medicine which is a renowned medical group.
Further, DaVita announced that HealthCare Partners has entered into a strategic partnership with Cigna, a global health insurance service company. Per the agreement, the duo will offer HMO (Health Maintenance Organization) health plans and integrated health care options to employers in and around Los Angeles.
Steady expansion in the overseas markets through strategic alliances and acquisition of dialysis centers has played a key role in boosting growth for DaVita. In the past few years, the company has strengthened its position in the emerging and developing markets of Columbia, Portugal, Malaysia, Taiwan, Saudi Arabia, China, India and Germany. This is expected to help DaVita deliver more efficient patient care.
However, the company expects a hike in its dialysis and related lab services general and administrative expenses in the upcoming quarters. DaVita’s plan to undertake initiatives to improve its information technology infrastructure is likely to result in higher costs. Investments to support regulatory compliance and legal matters as well as efforts to tap into new business opportunities will drive expenses.
Zacks Rank & Key Picks
DaVita HealthCare currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the medical sector are Orthofix International N.V. (OFIX - Free Report) , Luminex Corporation and IDEXX Laboratories, Inc (IDXX - Free Report) . Orthofix International and Luminex Corporation sport a Zacks Rank #1 (Strong Buy), while IDEXX Laboratories carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Orthofix International has a long-term expected earnings growth rate of 11.8%. The stock has surged roughly 39.1% over the last six months.
Luminex Corporation has a long-term expected earnings growth rate of 16.3%. The stock has rallied 14.1% over the last six months.
IDEXX Laboratories has a long-term expected earnings growth rate of 19.8%. The stock has climbed 39.2% over a year’s time.
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DaVita Banks on Acquisitions, Escalating Expenses a Concern
On Oct 6, we issued an updated research report on Denver, CO-based DaVita HealthCare Partners Inc. (DVA - Free Report) , a leading provider of dialysis services in the United States to patients suffering from chronic kidney failure, which is also known as end stage renal disease (ESRD).
Over the past six months, shares of the company have been trading below the broader industry. The stock has lost 12.4% compared with the broader industry’s 5.4% declined.
Acquiring dialysis centers and businesses that own and operate similar centers and other ancillary services has been DaVita’s preferred business strategy for long. This strategy has boosted the company’s top line to a large extent.
Of the major acquisitions in the recent past, The Everett Clinic, a medical group within the DaVita Medical Group division, acquired Totem Lake Family Medicine which is a renowned medical group.
Further, DaVita announced that HealthCare Partners has entered into a strategic partnership with Cigna, a global health insurance service company. Per the agreement, the duo will offer HMO (Health Maintenance Organization) health plans and integrated health care options to employers in and around Los Angeles.
Steady expansion in the overseas markets through strategic alliances and acquisition of dialysis centers has played a key role in boosting growth for DaVita. In the past few years, the company has strengthened its position in the emerging and developing markets of Columbia, Portugal, Malaysia, Taiwan, Saudi Arabia, China, India and Germany. This is expected to help DaVita deliver more efficient patient care.
However, the company expects a hike in its dialysis and related lab services general and administrative expenses in the upcoming quarters. DaVita’s plan to undertake initiatives to improve its information technology infrastructure is likely to result in higher costs. Investments to support regulatory compliance and legal matters as well as efforts to tap into new business opportunities will drive expenses.
Zacks Rank & Key Picks
DaVita HealthCare currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the medical sector are Orthofix International N.V. (OFIX - Free Report) , Luminex Corporation and IDEXX Laboratories, Inc (IDXX - Free Report) . Orthofix International and Luminex Corporation sport a Zacks Rank #1 (Strong Buy), while IDEXX Laboratories carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Orthofix International has a long-term expected earnings growth rate of 11.8%. The stock has surged roughly 39.1% over the last six months.
Luminex Corporation has a long-term expected earnings growth rate of 16.3%. The stock has rallied 14.1% over the last six months.
IDEXX Laboratories has a long-term expected earnings growth rate of 19.8%. The stock has climbed 39.2% over a year’s time.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>