Cyberonics Approves Share Buyback - Analyst Blog
January 29 2013 - 1:20PM
Zacks
In order to uphold investor confidence, neuromodulation company
Cyberonics (CYBX) disclosed the approval of a new
share repurchase program with authorization to repurchase one
million shares of the company’s outstanding common stock. However,
the company did not specify the exact timing and duration of the
share repurchase program nor did it reveal whether it will buyback
shares in the open market or via private negotiations.
The authorization is expected to commence after the completion
of the current buyback program that was initiated in November 2011.
Following the second quarter of fiscal 2013, 360,000 shares were
left under the ongoing program.
The announcement reflects Cyberonics’ confidence in its
fundamentals. The company had available cash of more than $118
million (up 22.6% year over year) until the most recent quarter
with no interest bearing debt on its balance sheet.
The stock is likely to appear more valuable on the back of the
recent news. Investors viewed the news in positive light as
reflected in the 4.47% increase in share price on Jan 28, 2013
(based on the adjusted closing price of $44.64).
With a positive earnings surprise in the last four quarters,
Cyberonics has an average beat of 16.74%. Moreover, the company’s
expected long-term earnings growth rate is 19%. The share
repurchase program will allow Cyberonics to further leverage
earning power going forward.
As estimates move higher for the current as well as the next
fiscal for Cyberonics, the stock carries a Zacks Rank #1 (Strong
Buy). Also worth mentioning in this context is that the stock has
consistently outperformed the S&P 500 index as well as the
S&P Healthcare Equipment Index since May 2010.
Other Stocks to Consider
Besides Cyberonics, other stocks in the medical sector which are
expected to outperform are Cantel Medical (CMN),
Haemonetics (HAE) and ResMed
(RMD), each carrying a Zacks Rank #1.
CANTEL MED CORP (CMN): Free Stock Analysis Report
CYBERONICS INC (CYBX): Free Stock Analysis Report
HAEMONETICS CP (HAE): Free Stock Analysis Report
RESMED INC (RMD): Free Stock Analysis Report
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