This health care supplier just beat earnings estimates by $0.05 and 2015 estimates have risen $0.11 in the past 90 days.
Steris Corp. (STE)
from Weiss Stock Ratings Heat Maps
Steris Corp. (STE, Rated B+) develops, manufactures and markets infection-prevention, contamination-control, microbial-reduction and procedural-support products and services for health-care, pharmaceutical, scientific, research, industrial and governmental customers worldwide.
While the corporation was founded as Innovative Medical Technologies in 1985 and renamed Steris in 1987, its history dates back to 1894 with the founding of American Sterilizer Co., a long-time, global leading innovator of sterilization products.
The company reported second-quarter fiscal 2015 adjusted earnings of 68 cents a share, up 23.6% from the year-ago level of 55 cents. The year-over-year improvement was primarily driven by the solid double-digit top-line growth. Furthermore, Steris’ reported earnings per share rose 4% year-over-year to 52 cents.
On October 13, Steris agreed to buy U.K.-based outsourced sterilization services provider Synergy Health PLC (SYR.L) for $1.9 billion in cash and stock. The company also plans to move to the U.K. for tax purposes. Post-acquisition, both Steris and Synergy will merge to form subsidiaries of U.K.-based “New Steris,” which is expected to generate annual revenues of approximately $2.6 billion with employee strength of 14,000. The acquisition is expected to be completed by March 31, 2015. The acquisition should allow the newly formed company to obtain a greater share in the international market. Moreover, management has plans to target the mostly untapped yet lucrative emerging markets.
And last month, BofA/Merrill Lynch analyst Erin Wilson bumped his price target on encouraging hospital volume QTD. The analyst also noted that while the direct impact from Ebola is immaterial for STE, the threat may drive “greater awareness from health care providers and facilities on infection control protocols, which may drive demand and buoy the shares.”
We agree, and consider this “under the radar” stock listed on our Best Hot-Sector Leaders Heat Map a good addition for your portfolio.
Mike Burnick, Weiss Stock Ratings Heat Maps, published by Money and Markets, a Division of Weiss Research, Inc., www.weissresearchissues.com/weiss-stock-ratings-heat-maps, issues@e.moneyandmarkets.com; 1-800-291-8545, November 13, 2014