Tags: Stryker | strong | buy | SYK

Stryker a Strong Buy, says Wall Street

By    |   Wednesday, 12 Oct 2011 02:52 PM

U.S. medical products maker Stryker (SYK) is having a good year, with sales up and Wall Street analysts screaming that it is a strong buy. Net sales for the second quarter ending June 30 came to $2.05 billion, up 16.3 percent from the same period a year earlier. The company says worldwide sales of reconstructive products came to $916 million for the second quarter of 2011, representing an increase of 7.4 percent.

Net profits came to $309.1 million, a 3 percent decrease from the second quarter of 2010. The company attributed the drop in profits to acquisition costs.

"Our second quarter results validate the strength of our diverse sales footprint, enabling us to deliver on our commitments despite ongoing macro-economic challenges," said CEO Stephen P. MacMillan in an earnings statement.

"We are excited about our ability to leverage the breadth of our product offering through continued investments in R&D coupled with selective acquisitions, share repurchases and dividends in order to maximize shareholder value."

Looking ahead, the company says in its earnings report that it expects net sales to grow up to 13 percent for 2011 thanks on demand for reconstructive products, medical surgery products, and neurotechnology and spine products.

Sales from previous acquisitions will beef up the top line as well.

Time to buy

Wall Street analysts say the time to buy is now. In 2011, the company has received six, seven reiterations at either buy or outperform, and one hold. Kaufman Brothers initiated coverage at buy in late September. That's 14 analysts saying you need to buy now.

Having a good product mix and low debt levels helps. Even ratings agencies agree. Standard and Poor's gave Stryker and A+ rating on the company's debt due 2016.

"The rating on Stryker Corp. is based on the company's satisfactory business risk profile and minimal financial risk profile. The business risk profile reflects the company's strong positions in reconstructive, medsurg, and neurotechnology and spine products," Standard and Poor's analysts write in a note on the company in September."

"The rating also reflects Stryker's sustained financial discipline, as well as the generally still increasing volumes and relatively stable market shares of the orthopedic products industry."

The company will report third quarter results on Oct. 18.

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U.S. medical products maker Stryker (SYK) is having a good year, with sales up and Wall Street analysts screaming that it is a strong buy. Net sales for the second quarter ending June 30 came to $2.05 billion, up 16.3 percent from the same period a year earlier. The company...
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Wednesday, 12 Oct 2011 02:52 PM
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