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.

Orthopedic major, Smith & Nephew plc (SNN - Snapshot Report) has entered into a definitive agreement to acquire assets of its Brazilian distributor, Pró Cirurgia Especializada (PCE). PCE has been associated with the company for the last 30 years and has distributed its sports medicine, orthopedic reconstruction and trauma offerings in Brazil.

Although no financial detail of the transaction has been announced, we are encouraged by the company’s focus on strengthening its foothold in the emerging markets. The deal is expected to close in the second half of 2013.

We believe that this takeover will allow Smith & Nephew to have a direct control over its business in Brazil. The Emerging and International markets recorded underlying growth of 14% to $133 million in the fourth quarter of 2012.

In the recent past, the company had shifted its focus to its Advanced Wound Management franchise due to a clouded orthopedic space. Earlier, in Dec 2012, Smith & Nephew acquired Texas-based Healthpoint Biotherapeutics for $782 million in cash. The company considers this acquisition as an important step toward creating a strong portfolio in bioactives, the fastest growing area of advanced wound management.

However, with the current improvement in the orthopedic market along with gradual signs of stability in the U.S., the company is also trying to ramp up its Advanced Surgical Devices business as well, which was underperforming during the global economic downturn. Along with the PCE acquisition, the company recently launched two new products from this segment.

Smith & Nephew currently carries a Zacks Rank #3 (Hold). Although the company is growing at a healthy pace in the under-penetrated emerging markets, challenging scenario in Europe continues to be an overhang. Pricing pressure also remains a major headwind.

While we remain on the sidelines for Smith & Nephew, other stocks in the medical devices space such as Conceptus , Hanger (HGR - Analyst Report) and CareFusion (CFN - Analyst Report) warrant a look. These stocks carry 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
BOFL HOLDING BOFI 85.58 +5.32%
DIXIE GROUP DXYN 15.41 +4.98%
CELL THERAPE CTIC 3.13 +4.68%
RAMBUS INC RMBS 12.23 +3.73%
DAIMLER AG DDAIF 93.03 +2.95%