Orthofix International N.V. (OFIX - Free Report) has been gaining investor confidence on consistently positive results. The stock has rallied 31.8% year to date, ahead of the S&P 500’s 11.9% gain and the broader industry’s 19.2% rise.
Moreover, this medical device company, which provides reconstructive and regenerative orthopedic and spine solutions to physicians globally, has a market cap of $865.48 million. The company also delivered a positive earnings surprise in two of the prevailing four quarters with average beat of 4.1%.
Banking on solid prospects, this Zacks Rank #1 (Strong Buy) stock is an attractive investment pick at the moment.
The company’s estimate revision trend for the current year has been positive. In the past 60 days, one analyst revised estimates upward, with no movement in the opposite direction. The magnitude of estimate revision for earnings was around 1.3% to $1.56 per share.
Let’s find out whether the recent positive trend is a sustainable one.
Orthofix delivered promising performance in the last reported second quarter. The company’s four strategic business units (SBU) delivered better-than-expected performance on significant contributions from Biologics and Spine Fixation.
Per management, the strength in the Biologics and Spine Fixation businesses is expected to continue on the back of improved performance by sales partners, expanded distributorship network and introduction of products.
Moreover, Orthofix seems to be upbeat on the encouraging response received from the Spinal-Stim and Cervical-Stim bone growth therapy devices launched earlier in 2017. Moreover, the company’s CETRA Anterior Cervical Plate has witnessed strong market adoption, resulting in sales of more than $1 million in the first five months of the launch.
Continuing with its slew of product developments and launches, the company recently presented RIVAL, a full line foot and ankle internal fixation system. Also, within its Extremity Fixation space, the company recently launched JuniOrtho, a new brand for orthopedic products, which currently accounts for roughly one-third of Extremity Fixation sales. We also believe that the raised full-year 2017 guidance is indicative of brighter prospects.
Orthofix has a strong cash balance that enables it to carry out share repurchase programs and in turn provide solid returns to investors.
On the flip side, currency fluctuations, competitive landscape and macroeconomic headwinds continue to pose challenges for the company. Moreover, higher operating expenses are a matter of concern. Also, the increased dependence on third parties for distribution of products exposes the company to risks.
Other Key Picks
Other top-ranked medical stocks are BioTelemetry, Inc. (BEAT - Free Report) , IDEXX Laboratories, Inc (IDXX - Free Report) and Amedisys, Inc. (AMED - Free Report) . BioTelemetry, IDEXX Laboratories and Amedisys carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
BioTelemetry has a long-term expected earnings growth rate of 19.2%. The stock has rallied roughly 11.2% over the last six months.
IDEXX Laboratories has a long-term expected earnings growth rate of 19.8%. The stock has gained around 36.4% over the last year.
Amedisys has a long-term expected earnings growth rate of 18.2%. The stock has gained around 10.3% over the last year.
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