What's Driving Orthofix International To A New 52-Week High

Shares of Orthofix International N.V. (NASDAQ:OFIX) scaled a new 52-week high of $61 on Mar 16, closing the session a bit lower at $59.71.

Shares of the company have outperformed the industry over the past three months. The stock has gained 8.5% compared with the S&P 500’s 2.7% gain and the industry’s 5.2% rise.

The stock has a market cap of $942.72 million. The companyhas a positive earnings surprise of 1.6% in two of the trailing four quarters. Also, it has a long-term expected earnings growth rate of 10.1%.

Orthofix carriesa Zacks Rank #3 (Hold). The company has an impressive Growth Style Score of A as well. Our Growth Style Score highlights all the vital metrics of a company’s financials to obtain a clearer picture of the quality and sustainability of its growth. Our research shows that stocks with an impressive Style Score of A or B when combined with a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 offer the best investment opportunities.

Taking the stable stock performance into consideration, we expect Orthofix to scale higher in the coming quarters based on several growth drivers:

Strong Fourth-Quarter Performance:

Orthofix exited the fourth quarter of 2017 on a solid note with both earnings and sales beating the Zacks Consensus Estimate. The top line was substantially driven by strength in Biologics and Spine Fixation businesses, expected to continue on the back of an improved performance by sales partners, expanded distributorship network and introduction of products.

Promising 2018 Prospects:

The year 2017 spelt success for Orthofix. This is because the company transformed its spine fixation strategic business unit, delivering exceptional growth and sales momentum in addition to a robust stream of new products in the period. In 2018, the company has already launched 20 products and has even scheduled another 17 to be released ahead. A strong current-year guidance is also indicative of its enhanced prospects.

FDA Nod and CE Mark Receipt for PhysioStim:

The market is upbeat about Orthofix’s recent CE Mark and FDA approval for its next-generation PhysioStim.The regulatory approval is likely to boost the company's revenues. Moreover, Orthofix also plans to unveil STIM onTrack, a new application for mobile devices along with the PhysioStim gadgets.

Acquisition of Spinal Kinetics Inc.:

The company has recently inked a definitive agreement to buy Spinal Kinetics Inc. The buyout is in line with the company’s aim to strengthen foothold in the $5.4-billion U.S. spine hardware market. Post the completion of the deal, Orthofix will expand its Spine Fixation portfolio through the addition of Spinal Kinetics’ CE Marked M6 artificial discs.

Key Picks

Better-ranked stocks in the broader medical sector include Bio-Rad Laboratories (NYSE:BIO) , athenahealth, Inc. (NASDAQ:ATHN) and PerkinElmer (NYSE:PKI) .

Bio-Rad Laboratories sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.The company has a long-term expected earnings growth rate of 20%.

athenahealth is a Zacks #1 Ranked player. The company has a long-term expected earnings growth rate of 21.5%.

PerkinElmer has a long-term expected earnings growth rate of 12.3%. The stock carries a Zacks Rank #2 (Buy).

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