CPTS Conceptus, Inc. (MM)

Shares of Stryker Corporation (SYK) achieved a new 52-week high, touching $67.36 on May 9, which is above its previous level of $67.15, and closed at $67.01 on the same date. The closing price of this orthopedic devices giant represented a solid one-year return of 27.7% and year-to-date return of 20.4%.

Average volume of shares traded over the last 3 months came in at approximately 1,562K. Currently, the stock trades at a forward P/E of 15.96x, above its peer group P/E of 14.43x.

Growth Drivers

Impressive first-quarter 2013 results, including an earnings surprise of 1.98% and the recent completion of the acquisition of a leading China-based trauma manufacturing company, Trauson Holdings, were the primary growth drivers for Stryker.

On Apr 24, Stryker reported its first-quarter earnings per share of $1.03 beating the Zacks Consensus Estimate by 2 cents and the year-ago earnings by 4.0%. Organic revenue growth along with cost curtailment efforts by the company’s global quality and operations group led to the year-over-year growth.

Stryker’s strong business fundamentals, well-diversified product portfolio and expanding foothold in emerging markets through acquisitions are expected to drive future growth. Moreover, the company remains committed to delivering incremental return to investors via share repurchase and dividends.

Recently, in Mar 2013, it completed the acquisition of a leading China-based trauma manufacturing company, Trauson Holdings. Stryker acquired this entity in an effort to strengthen its foothold in the Chinese orthopedic market.

Stryker, with a market-cap of $25.33 billion, is one of the world’s largest medical device manufacturers operating in the global orthopedic market. The recent stability in the domestic recon market and turnaround of its European business should improve results in 2013.

Stocks to Consider

Stryker carries a Zacks Rank #3 (Hold). With Stryker’s shares trading at all-time highs, any upside from here may be limited. Other medical stocks such as Conceptus (CPTS), TG Therapeutics (TGTX) and AtriCure (ATRC) warrant a look. While Conceptus carries a Zacks Rank #1 (Strong Buy), the other two stocks carry a Zacks Rank #2 (Buy).

 
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