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3 Reasons Why You Should Invest in Fresenius Medical Now

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Fresenius Medical Care (FMS - Free Report) is currently one of the top-performing stocks in the MedTech sector. Further, an increase in share price and strong fundamentals indicate its bull run. The stock has a Zacks Rank #2 (Buy).

Wide range of dialysis products, deliberate initiatives to attain market traction, solid international foothold as well as strategic acquisitions and divestments are major growth catalysts for the company. For 2018, Fresenius projects revenue growth of 8% at constant currency (cc). Net income attributable to shareholders is likely to increase around 13-15%.

Therefore, if you haven’t taken advantage of the share price appreciation yet, it’s time you add the stock to your portfolio.

Price Performance & Estimate Revision Trend

Estimates of Fresenius Medical moved upward over the past 60 days, reflecting analysts’ optimism in the stock. The company has seen the Zacks Consensus Estimate for current-year and 2019 earnings being revised 12.4% and 13.7% upward to $2.90 and $3.15, respectively.

Shares of this company have outperformed its industry in a year’s time. The stock has moved up 21.9% compared with the industry’s rally of 25.2%.

 

 

Let’s focus on the factors that make Fresenius Medical an attractive pick for investors.

Why an Attractive Pick?

‘Growth Strategy 2020’: Fresenius Medical has set up a strong long-term objective called the ‘Growth Strategy 2020’, to chalk out a few strategic initiatives for attaining solid market traction.

Per the postulates of the initiative, the company aims to boost revenues to $28 billion by 2020, corresponding to an average annual growth rate of around 10%. In this regard, revenues increased 7% on a year-over-year basis and reached $17.9 billion. The improvement can be attributed to strong performance in Health Care Services. Further, management forecasts an increase in revenues in tune with organic growth and acquisitions. At the same time, the company expects high single-digit annual growth in net income by 2020.

In addition to the stock’s impressive performance in its core dialysis business, Fresenius Medical intends to achieve the 2020 targets by expanding Care Coordination (non-dialysis segment) as well.

By the end of the fourth quarter of 2017, the company reconfirmed the mid-term outlook of its Growth Strategy 2020.

Global Efficiency Program Phase II: Fresenius Medical launched the second phase of its Global Efficiency Program (GEP II) in 2018. The program’s aim is to identify and realize efficiency potential and enhance the overall competitiveness of the company. Starting in 2018, GEP II intends to achieve sustained cost improvements of EUR 100-200 million per annum by 2020.

Wide range of Dialysis Products & Services: The company provides a wide range of dialysis products in its own dialysis clinics and to third-party clinics. These include modular machine components, dialyzers, bloodline systems, HD (hemodialysis) solutions, concentrates and water treatment systems.

Fresenius Medical offers a wide array of Hemodyalisis, Peritoneal dialysis and Acute Dialysis products as well. Earlier, the company sold more than 48,000 dialysis machines worldwide along with 130 million dialyzers. Till date, the company accounted for almost half of global sales of dialysis products. Around 3 million patients, worldwide, regularly undergo dialysis treatment.

Other Key Picks

A few other top-ranked stocks in the broader medical sector are Bio-Rad Laboratories (BIO - Free Report) , athenahealth, Inc. and PerkinElmer .

Bio-Rad Laboratories sports a Zacks Rank of #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. The company has a long-term expected earnings growth rate of 20%.

athenahealth is a Zacks #1 Ranked player. The company has a long-term expected earnings growth rate of 21.5%.

PerkinElmer has a long-term expected earnings growth rate of 12.3%. The stock carries a Zacks Rank #2.

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