3M Health Information Systems, a joint venture between 3M Company (MMM - Analyst Report) and Verily Life Sciences, recently entered into a strategic agreement to jointly develop a new population health measurement technology to enhance clinical and financial performance. Following the announcement, the company’s shares remained relatively flat to close at $169.72 on Oct 12.
Verily (formerly Google Life Sciences) is a bio research and engineering organization keen on augmenting healthcare outcomes and is an integral part of Alphabet Inc. (GOOGL - Analyst Report) . The company uses latest scientific and technological advances to solve problems in the health industry.
Per this collaboration, 3M will continue innovating latest health information systems, based on real-world problems faced by the healthcare industry today. This system will also help in protecting privacy and security of health data. It will be designed around 3M’s highly advanced health industry’s methodologies, which are used by federal agencies, hospital associations, and state Medicaid agencies to enhance quality reporting and payment models.
3M and Verily will jointly work to improve population-level health data-sets. These sets will be transformed into vital information so that the participating hospitals, health systems, payers, regulators and strategic partners will be well equipped to evaluate performance, reduce waste and identify areas that impact efficiency, quality and cost. Such collaborations will help improve the company’s offerings in the healthcare space, in-turn positively impacting its top line.
On Sep 6, 2016, 3M acquired Semfinder, a premier developer of semantic coding of medical services. The deal expanded its healthcare portfolio and is likely to enhance its revenues, going forward. The acquisition of Semfinder will help 3M cater to the changing needs of the customers and enable them to develop next-generation solutions for healthcare records coding. The deal will also help the company expand its 3M Encompass System market worldwide.
Maplewood, MN-based 3M employs 90,000 people worldwide, with operations in more than 65 countries. It manufactures over 55,000 products, including adhesives, abrasives, laminates, passive fire protection, dental and orthodontic products, electronic materials, medical products, car-care products (sun films, polish, wax, car shampoo, treatment for the exterior, interior and the under chassis rust protection), electronic circuits, and optical films.
3M currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry include Raven Industries Inc. (RAVN - Analyst Report) and Leucadia National Corporation (LUK - Snapshot Report) , both carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Raven has a long-term earnings growth expectation of 10% and is currently trading at a forward P/E of 44.2x. Its share price has increased by approximately 41.3% year to date.
Leucadia National has a long-term earnings growth expectation of 18% and is currently trading at a forward P/E of 96.4x. Its share price has increased by approximately 11.6% year to date.
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