Is AtriCure on the auction block? | Wall Street Beat
AtriCure Inc. (NSDQ:ATRC) could be poised for a buyout over the next year to 18 months, according to Canaccord Genuity analyst Jason Mills.
"We like the company’s leadership position in the surgical atrial fibrillation market currently, and we also favor the company’s new product and clinical trial pipeline," Mills wrote in a note investors. "Both make us optimistic the company can produce double-digit growth for a while. We also see ATRC as a potential take-out candidate over the next 12-18 months."
Mills named four other medical device firms the investment advisor has his eye on: HeartWare International (NSDQ:HTWR) and arch-rival (and onetime suitor) Thoratec Corp. (NSDQ:THOR), Spectranetics (NSDQ:SPNC) and Volcano Corp. (NSDQ:VOLC):
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"We continue to believe HTWR will achieve leading outside the United States in 2011 and number one worldwide share by 2015. We would be buyers of HTWR at current levels."
"We continue to believe the lead management business is worth the stock’s current valuation on its own, noting its growth profile, high barriers to entry, low penetration, and SPNC’s leadership position."
"For long-term investors, we recommend targeting a slightly lower entry point to accumulate THOR."
"We have a favorable view of the company’s revenue growth trajectory and are encouraged by improving operating leverage. However for now remain on the sidelines looking for a better entry point."
Zoll Medical (NSDQ:ZOLL) is carrying more than $100 million worth of goodwill and intangibles on its balance sheet, prompting Rex Moore of the Motley Fool website to flag the company’s stock.
"Zoll Medical carries $104.5 million of goodwill and other intangibles on its balance sheet. Sometimes goodwill, especially when it’s excessive, can foreshadow problems down the road. Could this be the case with Zoll Medical?," asked Moore, an associate analyst for Motley Fool Hidden Gems.
Taking a close look at a pair of metrics used to gauge the risk of an AOL-Time Warner-esque implosion – intangible assets ratio and tangible book value – Moore concludes that ZOLL shares deserve a "yellow flag."
Intangible assets ratio is the percentage of total assets made up by goodwill and other intangibles. An IAR score of 20 percent or more should give investors pause, according to Moore; Zoll’s score is 24 percent, not a cause for panic "but you’ll want to keep an eye on this number over the next few quarters," according to the analyst.
Tangible book value is what’s left after calculating IAR. A negative score is bad because it can indicate that a company lacks the resources to remain competitive during a recession or in the face of competition. Zoll’s TBV is $247.7 million, "so no yellow flag here," Moore wrote.
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Analyst: Stryker & Zimmer likely to please The Street
Stryker Corp. (NYSE:SYK) and Zimmer Holdings (NYSE:ZMH) are likely to meet or beat Wall Street estimates for their third-quarter results, according to RBC Capital Markets analyst Glenn Novarro.
"Stability in U.S. hospital capital spending and the orthopedic markets will help both Stryker Corp. and Zimmer Holdings Inc. meet analyst expectations for the third quarter, and that could boost company shares, The Associated Press reported.
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RBC reiterates Becton, Dickinson rating
RBC Capital reiterated its "sector perform" rating for Becton, Dickinson & Co. (NYSE:BDX)setting a rpcie target of $75.
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TheStreet.com upgraded its rating on shares of Analogic Corp. (NSDQ:ALOG), citing the MRI pioneer’s "revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, expanding profit margins and solid stock price performance,"
"We feel these strengths outweigh the fact that the company has had sub-par growth in net income," the analysts wrote.
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