International health care products major, Covidien plc has expanded its portfolio of Shiley neonatal and pediatric tracheostomy tubes with the launch of a new offering. The Shiley brand has been a part of Covidien’s Airway and Ventilation product line, under the larger Medical Devices segment, for over 40 years.
The advanced cuffless offering has been designed to cater to the unmet clinical needs across medical centers as well as within patient’s homes. It provides a proper fit and maintains airway patency to neonatal and pediatric patients, thereby enhancing patient safety and comfort. The Shiley neonatal and pediatric tracheostomy tubes have been approved for sale in the U.S., Canada and Europe.
Covidien has an impressive history of developing and manufacturing high-quality products in a cost-effective manner. The latest offering should further boost its technologically advanced products portfolio. Airway & Ventilation sales rose 8% to $195 million in the first quarter of 2013, aided by the acquisition of Newport Medical and double-digit growth in ventilator sales.
Covidien currently carries a Zacks Rank #3 (Hold). The company is positioned well to achieve its long-term revenues and earnings growth targets based on its attractive fundamentals, strategic R&D investment, effective execution, new product cycle and expansion into emerging markets. It is also enhancing shareholder value through dividends and share repurchases, leveraging healthy free cash flow and strong earnings.
However, Covidien faces stiff competition and remains exposed to pricing and utilization headwinds, along with acquisition risks. We also remain concerned about the tepid U.S. health services industry and the soft European economy. Moreover, foreign exchange translation is expected to dampen growth.
While we remain on the sidelines regarding Covidien, companies from the medical sector like NuVasive
(NUVA - Analyst Report
(CPHD - Analyst Report
) and Cyberonix
(CYBX - Analyst Report
) are expected to do well. All these stocks carry a Zacks Rank #1 (Strong Buy).