CHICAGO, July 11, 2011 /PRNewswire/ -- Zacks Equity Research highlights Altera Corp. (Nasdaq: ALTR) as the Bull of the Day and PetMed Express (Nasdaq: PETS) as the Bear of the Day. In addition, Zacks Equity Research provides analysis Medtronic (NYSE: MDT), Boston Scientific Corporation (NYSE: BSX) and St Jude Medical (NYSE: STJ).
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Full analysis of all these stocks is available at http://at.zacks.com/?id=2678.
Here is a synopsis of all five stocks:
Altera Corp. (Nasdaq: ALTR) continues to post solid growth, and we believe this growth will be sustainable in the long run. As expected, Altera faced a minor inventory adjustment and a temporary slowdown in the wireless segment during the first quarter. However, results topped our expectations.
Earnings estimates for 2011 increased by $0.09 after the first quarter report. The industry-leading 40-nanometer product execution and the company’s ongoing efforts to improve operating efficiency remain the keys to long-term revenue growth.
We believe the company gained market share in 2010 from rival Xilinx Corporation. We find the stock attractive at current levels and, therefore, upgrade our recommendation to Outperform from Neutral.
PetMed Express (Nasdaq: PETS) reported a disappointing quarter with EPS of $0.19, missing the Zacks Consensus Estimate of $0.22 and the year-ago quarter’s $0.27. While new order sales declined on fewer new customers, revenues increased 1.2% to $50.9 million.
Both gross and operating margins declined due to higher product and advertising costs. This is a big blow for the company as it depends heavily on advertising to expand its customer base. Moreover, economic uncertainty is taking a toll on the company, forcing consumers to switch to cheaper alternatives.
We do not expect the situation to improve significantly in the near future. We maintain our Underperform recommendation on the stock.
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Medtronic Expands Surgical Business
Leading medical devices player Medtronic (NYSE: MDT) has taken the inorganic route to strengthen its presence in advanced surgical devices. The company recently decided to acquire two companies Salient Surgical Technologies for $525 million and Peak Surgical for $120 million. Both the transactions are subject to several approvals.
Salient Surgical deals with haemostatic sealing of soft tissue and bone in a variety of surgical procedures including orthopedic surgery, spine, open abdominal and thoracic procedures. Following this deal, Medtronic’s Surgical Technologies portfolio would include Aquamantys system with Transcollation technology. Salient records annualized revenue of about $100 million. Medtronic already holds an ownership stake in Salient, excluding which the transaction value would be approximately $480 million.
Peak Surgical specializes in surgical instruments based on its PlasmaBlade technology. The Peak PlasmaBlade consists of disposable cutting devices with insulation technology that provides accuracy of scalpel and bleeding control with minimal thermal tissue damage. The technology is approved for several applications Ear, Nose and Throat (ENT), plastic reconstructive, orthopaedic and general surgery.
Peak Surgical’s annualized revenue is $20 million. After taking into account Medtronic’s current stake in Peak Surgical, the transaction value comes to approximately $105 million.
During the last reported quarter, revenues from Surgical Technologies segment increased 9% to $298 million (7% at CER) driven by strong performances across the portfolio of ENT, power systems and navigation product lines, as well as balanced growth across capital equipment, disposables and service.
Medtronic has been looking at diversifying its portfolio over the past few quarters as its core segments Cardiac Rhythm Disease Management (CRDM) and Spinal have been witnessing several challenges and lower revenues. However, the two recent acquisitions are unlikely to have any significant impact on the top line in near future as Surgical Technologies account for 7% of total sales. The company also faces tough competition from players such as Boston Scientific Corporation (NYSE: BSX) and St Jude Medical (NYSE: STJ).
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.
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