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Merit Medical (MMSI) to Refinance Debt via Share Offering

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South Jordan, UT-based Merit Medical Systems, Inc. (MMSI - Free Report) announced that it has commenced a follow on public offering of its common stock. The company expects to use the proceeds from the offering to repay debt under its existing credit facility.
 
Stock Performance

The price performance of Merit Medical has been encouraging of late. Over the last three months, the stock gained 17.55%, outshining the Zacks classified Medical/Dental-Supplies sub-industry’s gain of roughly 8.43%. Furthermore, the stock’s current return is higher than the S&P 500’s return of 5.32% over the same time frame.

Coming to the estimate revision trend of the stock, one analyst raised estimates in the last month compared to no movement in the opposite direction for the full year. This justifies the stock’s Zacks Rank #1 (Strong Buy).



 

Details of Public Offering

Coming back to the news, the company plans to offer $125.0 million of common stock for the follow on offering. However, the terms of the offering is yet to be decided. As of Dec 31, 2016, the company had cash and cash equivalents worth $19.2 million versus $4.2 million in the year-ago period. Long-term debt was $314.4 million versus $197.6 million in the year-ago period.

Going forward, we are upbeat about Merit Medical’s HeRo platform. The launch of the proprietary Super HeRO and HeRO Ally products also brought along significant opportunities for the company. Notably, the HeRo product line was acquired by Merit Medical from CryoLife earlier this year. Per management, the ‘Think HeRO Graft Training program’ in the HeRo platform is likely to provide substantial scope over the long run.

We are also optimistic about the long-term expected growth of the stock which is pegged at 12.5% and projected sales growth of 12.04%, which is a lot higher than the industry average of 5.3%.

Merit Medical Systems is engaged in the development, manufacture and distribution of proprietary disposable medical devices used in interventional, diagnostic and therapeutic procedures. The company serves client hospitals worldwide with a domestic and international sales force totaling approximately 280 individuals.

Key Picks

Other well-placed stocks in the broader medical sector include Inogen Inc. (INGN - Free Report) , Avinger, Inc. (AVGR - Free Report) and Fluidigm Corporation . Notably, Inogen sports a Zacks Rank #1 while Fluidigm and Avinger carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Inogen has a long-term expected earnings growth rate of 17.05%. Notably, the stock has an impressive one-year return of 77.4%.

Avinger projects sales growth of 30.6% for the current year. Additionally, the company delivered a positive earnings surprise of 27% last quarter.

Fluidigm Corporation has a long-term expected earnings growth rate of 25%. The stock added 6.08% over the last one year.

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