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5 Reasons Why You Should Buy CONMED (CNMD) Stock Right Now

Zacks

CONMED Corporation CNMD is currently one of the top-performing stocks in the MedTech space. Improvement in price performance and strong fundamentals reflect the stock’s bullish run. Therefore, if you haven’t taken advantage of the price appreciation yet, it’s time you add the stock to your portfolio.

Headquartered in Utica, NY, CONMED is a major medical products manufacturer specializing in surgical instruments and devices for minimally invasive procedures and monitoring.

In 2017, the company performed impressively and has the potential to sustain the momentum in the upcoming period. A long-term expected earnings growth rate of 11.5% is a positive.

Why an Attractive Pick?


Solid Q4 Results

CONMED delivered stellar performance in the fourth quarter, beating earnings and revenue estimates. Performance in the company’s business segments has been commendable, with the Orthopedic Surgery rebounding after six quarters of decline.

Solid focus on innovation continues to drive sales and gain leverage in the international market. A raised guidance and shrinking debts instill optimism.

Notably, the company’s long-term debts declined 3.4% to $471.1 million on a year-over-year basis.

Share Price Appreciation

A glimpse at the company’s price trend reveals that the stock has had an impressive run on the bourses year to date. CONMED’s shares have returned 17.9% versus the S&P 500 index’s fall of 0.2%. The current return is also greater than the industry’s gain of just 2.9%.

Northward Estimate Revisions

Four estimates for the current year moved north over the past 60 days versus no southward revisions, which indicates analysts’ optimism in the company. The Zacks Consensus Estimate for adjusted earnings rose 7% to $2.14 for the current year.

The positive trend signifies analyst’s bullish sentiment. The company holds a Zacks Rank #2 (Buy), which indicates robust fundamentals and expectations of outperformance in the near term. For 2018, the Zacks Consensus Estimate for revenues is pegged at $835.1 million, up 4.9% year over year.

For 2018, the company expects sales growth in the range of 4-5% at constant currency (cc). Adjusted earnings per share are projected in the range of $2.11-$2.17, up 12-15% from fiscal 2017.

CONMED Corporation Price and Consensus

General Surgery, a Consistent Performer

General surgery consists of a complete line of endo-mechanical instrumentation for minimally invasive laparoscopic and gastrointestinal procedures, a line of cardiac monitoring products as well as electrosurgical generators and related instruments.

On a constant-currency basis, general surgery grew 9.1% in the fourth quarter of 2017, posting its eighth straight quarter of positive gains. Additionally, domestic general surgery grew 9.6%, riding on solid growth from Advanced Surgical and endoscopic technologies, which delivered decent performances in the fourth quarter as well as in the full year.

Based on strong performances in the segment, the organization is positioned to drive mid-single-digit revenue growth and double-digit earnings growth organically on a sustainable basis.

Solid Market Trends

CONMED is benefiting from the increasing trend of using minimally invasive techniques as a large percentage of the company’s products are designed for these procedures. The use of minimally invasive surgery lowers costs by reducing patient trauma, recovery time and the length of hospitalization.

A research report by Markets And Markets suggests that the global minimally invasive surgical instruments market is estimated to reach a worth of $21.47 billion by 2021 from $13.89 Billion in 2016, multiplying at a CAGR of 9.1%.

Such solid market trends are likely to fortify CONMED’s foothold in the niche space.

Other Key Picks

A few other top-ranked stocks in the broader medical sector are PerkinElmer PKI, Bio-Rad Laboratories BIO and Becton, Dickinson and Company BDX.

Bio-Rad Laboratories has a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. The company has a long-term expected earnings growth rate of 25%.

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

Becton, Dickinson and Company has a Zacks Rank #2. The company has a long-term expected earnings growth rate of 13.3%.

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