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Here's Why You Must Add Haemonetics (HAE) to Your Portfolio

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Haemonetics Corporation (HAE - Free Report) has been on a healthy growth trajectory of late. Shares of the company have soared 66.2% in the last six months, ahead of the S&P 500 index’s 11% gain. The stock has a market cap of $3.70 billion.

Over the past year, this Zacks Rank #1 (Strong Buy) stock has returned 84.5%, compared with the S&P 500 index’s gain of 14.7%. This value is also higher than the broader industry’s 13% rally.


 

In view of the above positives, one may expect the company to scale new highs in the upcoming quarters as well. Further, the stock delivered an average positive earnings surprise of 17.5% in the trailing four quarters. A positive growth rate of 14.2% for the next year also instils investors’ optimism in the stock.

Moreover, estimate revision trends for current-year earnings look impressive. For the stock has seen the Zacks Consensus Estimate being moved north five times over the last 60 days with no downward revision witnessed.

Factors Driving Haemonetics

Let’s take a look at the possible growth propellers:

Surging Segmental Revenues: Last quarter, Plasma revenues for this Massachusetts-based blood management company were up 4% on a year-over-year basis. The upside was driven by a strong performance in disposables and software, particularly in the United States. Additionally, Hospital Business revenues grew 6% on the back of consistent results in North America as well as improved international results in the key markets.

Expanding Margins: Last quarter, gross margin expanded 310 basis points (bps) to 47.6% on a year-over-year basis. Meanwhile, operating margin improved 270 bps to 17.9% year over year.

NexSys PCS: Market seems to be upbeat about Haemonetics’ recently-introduced new platform, NexSys Plasma Collection System (PCS). The device is designed to increase overall plasma yield per donor through planned embedded software upgrades.

Notably, the device has also recently received an FDA clearance with a CE Mark expected come spring. Moreover, management expects a 510 (k) submission for the embedded software and firmware via which, the NexSys PCS functions.

EPS Guidance Raised: Haemonetics increased 2018 guidance for earnings estimated the metric in the range of $1.80-$1.90 per share compared with the previous projection of $1.65-$1.75. This upped view is indicative of the continuation of the overall bullish sentiment surrounding the stock.

Other Key Picks

Some other top-ranked stocks in the broader medical space are Centene Corporation (CNC - Free Report) , BIOVERATIV INC and athenahealth, Inc. , each sporting the same solid Zacks Rank of 1 as Haemonetics. You can see the complete list of today’s Zacks #1 Rank stocks here.

Centene’s projected long-term growth rate is 14.4%. The stock has returned 16.9% in the past six months.

BIOVERATIV has an expected long-term growth rate of 14%. The stock has skyrocketed a whopping 106.8% in the past three months.

athenahealth has a positive expected long-term growth rate of 20.7%. The stock has gained 5.1% in the past three months.

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