Back to top

Image: Bigstock

Here's Why You Should Add Bio-Rad (BIO) to Your Portfolio

Read MoreHide Full Article

Bio-Rad Laboratories, Inc.  (BIO - Free Report) has been gaining investor confidence on consistently positive results. Over the past year, the stock has gained 11%, outperforming its industry’s 2.8% rise. Also, the company has fared better than the S&P 500’s 1.3% fall.

This renowned manufacturer and global supplier of clinical diagnostics and life science research products in the healthcare, analytical chemistry life science research and other markets has a market cap of $9.10 billion. The company’s projected five-year growth rate is favorable at 15% compared with the industry’s 13.3%.

With solid prospects, this Zacks Rank #1 (Strong Buy) stock is an attractive investment pick for now.

The company’s estimate revision trend for the current year has been positive. In the past 60 days, two analysts revised estimates upward, with no movement in the opposite direction. Resultantly, earnings estimates increased around 22.6% to $7.16 per share.

Further, the Zacks Consensus Estimate for current-year revenues of $2.36 billion reflects an improvement of 2.9% year over year.

Let’s find out whether the recent positive trend is a sustainable one.

Solid Blood Typing Market Prospects

Bio-Rad offers a broad range of platforms, reagents, data management and connectivity solutions to cater to different blood typing demand, offering efficient and reliable results for blood grouping, phenotyping, crossmatching, antibody screening and identification, direct antiglobulin tests, and single antigen typing. The company has also been actively expanding its portfolio for the blood typing market.

Focus on International Markets

In recent times, Bio-Rad has been deriving more than 60% of its net sales globally. Europe happens to be the largest international market for the company. While fourth-quarter revenue growth in the region was sluggish, Bio-Rad delivered impressive performance across its other major geographies.

Notably, constant currency sales at the Life Science segment were particularly strong in China. Meanwhile, sales at the Clinical Diagnostics segment were strong in China and Japan, partially offset by a decline in Europe. The company expects to return to growth in diagnostics in Europe, Middle East and Africa in 2019.

Strong Balance Sheet

Effective capital deployment has been one of the key contributors to earnings growth. Bio-Rad exited 2018 with cash and cash equivalents and short-term investments of $850.3 million compared with $760.5 million at the end of 2018. For 2018, net cash flow from operating activities was $285.5 million compared with $104.1 million in the year-ago period.

Other Key Picks

A few other top-ranked stocks in the broader medical space are Veeva Systems Inc (VEEV - Free Report) , Hologic, Inc. (HOLX - Free Report) and Integer Holdings Corporation (ITGR - Free Report) .

Veeva Systems’ long-term earnings growth rate is projected at 14.8%. The stock flaunts a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Integer Holdings projects earnings growth rate of 31.2% for the first quarter. It currently carries a Zacks Rank #2.

Hologic’s long-term earnings growth rate is projected at 8.9%. The stock flaunts a Zacks Rank #2.

Zacks' Top 10 Stocks for 2019

In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?

Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.

See Latest Stocks Today >>

Published in