Philips Gets FDA Clearance To Market New EL18-4 Transducer

Koninklijke Philips N.V. (NYSE:PHG) recently announced that it has obtained the 510(k) clearance from the U.S. Food and Drug Administration (FDA) for marketing its new eL18-4 transducer for ‘small parts’ assessment. The company is expected to launch the newest solution at the 16th World Federation for Ultrasound in Medicine and Biology (“WFUMB”) Congress in Taipei.

The new eL18-4 transducer, an ultrasound exam, helps in detection of abnormalities in the small organs that are close to the skin. Further, it is utilized to assess musculoskeletal injuries as well. The new solution enables clinicians to assess and treat small parts as well as facilitates improvement in care for patients with all-in-one functionality.

Philips has successfully evolved from a lighting company into a healthcare technology provider, over the past couple of years. Moreover, the company's transformation from a hardware-oriented to a software-driven business, with a higher-margin and recurring-revenue model, bodes well for investors. The company also believes that increased spending on healthcare and fitness will drive future growth. In the past three months, the company’s stock has yielded a return of 12.1%, outperforming the industry’s average increase of 10.3%.

The Zacks Rank #2 (Buy) company is highly optimistic about the prospects of its Diagnosis & Treatment vertical on account of positive industry trends, with the Image-Guided Therapy and Ultrasound equipment segments acting as major profit churners. This apart, the company’s Connected Care & Health Informatics vertical is progressing well, and is experiencing strength in Patient Care & Monitoring Solutions.

Moreover, it continually scouts for strategic acquisitions to supplement the growth of its core businesses. Recently, the company acquired image-analysis software provider TomTec Imaging Systems. Such acquisitions bode well for stronger growth of its Diagnosis & Treatment business.

Other Stocks to Consider

Some other top-ranked stocks from the same space include Coherent, Inc. (NASDAQ:COHR) , Arista Networks, Inc. (NYSE:ANET) and Amphenol Corporation (NYSE:APH) . While Coherent sports a Zacks Rank #1 (Strong Buy), Arista Networks and Amphenol Corporation carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Coherent has surpassed estimates thrice in the trailing four quarters, with an average positive earnings surprise of 15.0%.

Arista Networks has outpaced estimates in the preceding four quarters, with an average earnings surprise of 22.8%.

Amphenol Corporation has surpassed estimates in the trailing four quarters, with an average positive earnings surprise of 7.9%.

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