On Dec 30, Zacks Investment Research raised LeMaitre Vascular Inc. LMAT to a Zacks Rank #1 (Strong Buy) primarily buoyed by upward estimate revision.
Notably, LeMaitre hit a 52-week high of $17.90 on Dec 29, eventually closing a tad bit lower at $17.77, which represented a year-to-date return of 132.3%.
Why the Upgrade?
Solid third-quarter 2015 results, raised 2015 sales guidance, innovative product pipeline and expanding international presence, particularly in China, are the key catalysts that drove the upgrade.
These factors were also responsible for the positive estimate revisions. The Zacks Consensus Estimate for fiscal 2015 earnings is currently pegged at 37 cents per share, which has increased a penny over the last 30 days. Over the same time frame, the 2016 Zacks Consensus Estimate for earnings has been revised up by a couple of cents to 44 cents per share.
LeMaitre expects to launch a new product – AnastoClip – in the fourth quarter of 2015 or the first quarter of 2016. The company’s TRIVEX System was recently approved by China’s Food and Drug Administration. The approval will help the company proceed with its previously signed five-year $7.8 million distribution agreement in China.
LeMaitre expects to grow through sales force expansion, continuing investments in research & development (R&D) and accretive acquisitions. These, the company believes will help it to achieve sales and operating income growth of 10% and 20%, respectively, over the long term.
Currently, LeMaitre employs 81 sales representatives globally that will increase further (5 more in 2016) with the expansion of presence in new territories. The company’s aggressive acquisition strategy (17 acquisitions in last 17 years) has significantly expanded its customer base over the years (almost 4000 worldwide hospital customers). Apart from fending off competition, aggressive acquisitions have also provided significant cross-selling opportunities.
Other Stocks to Consider
One may consider other favorably ranked stocks in the same space like INSYS Therapeutics INSY, ICU Medical ICUI and NxStage Medical NXTM, all of which sport a Zacks Rank #1 (Strong Buy).
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