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Here's Why You Should Retain Wright Medical Stock For Now

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Wright Medical Group N.V. continues to benefit from strong international presence, solid prospects in the global orthopedic space and improved product launches. However, adverse forex remains a concern.

Shares of Wright Medical have gained 8.9%, compared with the industry’s growth of 13% in a year’s time. Meanwhile, the S&P 500 Index has rallied 18.3%.

The company, with a market capitalization of $3.7 billion is an orthopaedics medical device company specializing in extremities and biologics products. It anticipates earnings to improve 14.6% over the next five years. Moreover, it has beat estimates in the trailing four quarters by 66.7%, on average.

Let’s take a closer look at the factors that substantiate the company’s Zacks Rank #3 (Hold).

What’s Deterring the Stock?

Forex continues to remain a concern as the company generates a substantial portion of its total revenues from international operations. This, in turn, can be adversely affected by fluctuations in foreign currency exchange rates.
In fact, Wright Medical anticipates foreign currency to negatively impact 2019 sales.

What’s Favoring the Stock?

Wright Medical has been gaining from international expansion for quite some time now. In fact, the company’s international net sales are anticipated to improve significantly on the back of steady performance in Biologics.

Further, the company has been reaping benefits from improving trends in the global orthopedic space.

Moreover, the company has a significant presence in the key emerging markets like Asia, which boosts prospects.

Additionally, the company’s diversified product portfolio has been bolstering overall performance over a considerable period of time. Notably, the company is likely to gain from the REVIVE revision shoulder system.

Product launches, which include internally developed products and those from acquisitions, have been driving the company’s top line and the trend is expected to continue.

Interestingly, the Cartiva buyout is expected to open up market opportunities worth $400 million for Wright Medical. For the remainder of 2019, Cartiva sales are projected at $13 million. The same for the fourth quarter of 2019 is estimated at $7.5 million.

Which Way Are Estimates Trending?

For 2019, the Zacks Consensus Estimate for revenues is pegged at $927.7 million, indicating an improvement of 10.9% from the year-ago reported figure. The same for earnings stands at 17 cents per share.

Stocks to Consider

Some better-ranked stocks from the broader medical space are Conmed Corporation CNMD, West Pharmaceutical Services, Inc. WST and Edwards Lifesciences Corporation EW, each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Conmed has a long-term earnings growth rate of 17%.

West Pharmaceutical has a long-term earnings growth rate of 14%.

Edwards Lifesciences has a long-term earnings growth rate of 14.8%.

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