It looks like the market is going to have to wait for a bill to “Repeal and replace” Obamacare. Regardless of what side of the political isle you find yourself on, it’s tough to discount the impact of such an event on stocks in the medical business. This is a varied business, with pockets that are more well insulated to “Repeal and replace” risks than others. One of the more insulated areas of this market are the medical device companies. When I say more insulated, I mean when compared to drug makers or insurers.
One such company is today’s Bull of the Day Inogen (INGN). Inogen, Inc. is a medical technology company. It offers oxygen concentrator, cart, carry bags, backpacks, external battery chargers and universal power supply for obstructive pulmonary disease patients. The Company's products include Inogen One G3 and Inogen One G2. It sells its products in the United States and internationally. Inogen, Inc. is headquartered in Goleta, California.
The stock is a Zacks Rank #1 (Strong Buy) stock right now with a Growth Style Score of A. The major reason for the favorable Zacks Rank is the recent bullish behavior from analysts covering the stock. Four analysts have increased their estimates for the current year while four have also increased their EPS estimates for next year. The bullish behavior has pushed up our Zacks Consensus Estimate from 78 cents or 98 cents for the current year and has inflated next year’s number from $1.02 to $1.18.
Shares of INGN have outperformed the Medical Instruments Industry YTD, with most of that outperformance coming in the last month and a half. INGN is up 14.8% so far this year while the industry is up only 4.7%. To put that into perspective, the S&P 500 is up 5.5% on the year. Currently, the medical device industry ranks in the Bottom 44% of our Zacks Industry Rank.
It should come as no surprise that INGN has been rallying for quite some time, in line with the increased EPS estimates coming from analysts. This is a stock that was trading below $45 in June of last year which has rallied all the way to $75. There’s been a bit of a consolidation recently with shares bouncing between $74 and resistance just under the 52-week high near $80. With the 50-day moving average providing support down at $72.66 I think there is a nice risk/reward scenario being carved out here.
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