The Zacks Analyst Blog Highlights: Thoratec, HeartWare, Merit Medical, Mesa Laboratories and Cantel Medical

 The Zacks Analyst Blog Highlights: Thoratec, HeartWare, Merit Medical, Mesa
                       Laboratories and Cantel Medical

PR Newswire

CHICAGO, Dec. 13, 2012

CHICAGO, Dec. 13, 2012 /PRNewswire/ --Zacks.com announces the list of stocks
featured in the Analyst Blog. Every day the Zacks Equity Research analysts
discuss the latest news and events impacting stocks and the financial markets.
Stocks recently featured in the blog include Thoratec Corp (Nasdaq:THOR),
HeartWare (Nasdaq:HTWR), Merit Medical (Nasdaq:MMSI), Mesa Laboratories
(Nasdaq:MLAB) and Cantel Medical (NYSE:CMN).

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Here are highlights from Wednesday's Analyst Blog:

Thoratec Soars to 52-Week High

Shares of Thoratec Corp (Nasdaq:THOR) reached a 52-week high of $39.50 on
Tuesday, December 11, 2012. The medical device stock continues to edge past
resistance levels and soared to another 52-week high. The closing price as of
December 11, 2012 was $39.23, which represented a solid annual return of about
28%.

The stock carries a short-term Zacks #1 Rank (Strong Buy).

Growth Drivers

A profound mix of solid third quarter earnings, raised guidance, HeartMate II
approval in Japan, expanded geographical reach and share buybacks are driving
the stock price.

With respect to earnings surprise, Thoratec has topped the Zacks Consensus
Estimates in six of the last seven quarters with an average beat of 14.3%. Its
third quarter adjusted earnings per share of 44 cents easily surpassed the
Zacks Consensus

Estimate of 33 cents as well as the year-ago earnings of 34 cents per share.

Total revenues improved 15% on a year-over-year basis to $117.8 million in the
quarter, surpassing the Zacks Consensus Estimate of $112 million. Growth was
led by higher volume of the HeartMate II product line (up 27% year over year)
as well as the higher adoption of Destination Therapy (DT) in the domestic
market.

Thoratec revised its financial forecast for 2012. The company expects revenues
between $477 million and $483 million compared with the prior guidance of $460
million and $470 million. The updated guidance includes higher sales estimates
for the HeartMate II product line and solid expansion of the ventricular
assist device (VAD) market.

For 2012, earnings per share are expected to be in a band of $1.79 and $1.83
compared with the prior guidance of $1.67 and $1.73.

Thoratec continued its momentum in the offshore market, especially in Western
Europe. The company witnessed higher adoption of its offerings in newer
markets like Turkey, where it expects to capture further market share in the
near-term. However, HeartWare (Nasdaq:HTWR) was the first to gain a foothold
in Turkey.

Meanwhile, the recent approval of HeartMate II for bridge-to-transplantation
(BTT) in Japan, the second largest market for medical devices, is a lucrative
route to enter the Asia-Pacific market and garner incremental revenues. The
demographic trends and increasing healthcare expenditure in Japan should allow
for improved growth profile.

Capital allocation in the form of share buybacks should further boost investor
sentiment. Last month, Thoratec announced a share buyback program of $150
million.

Estimates Inch Up

The Zacks Consensus Estimate for 2012 increased approximately 8.1% to $1.61
per share over the last 60 days. The current estimate implies year-over-year
growth of 16.49%.

For 2013, the Zacks Consensus Estimate rose by 5.1% over the same time frame
to $1.66 per share, implying year-over-year growth of 3.42%.

Valuation

Based on 2012 earnings estimates, Thoratec is trading at a price-to-earnings
ratio (P/E) of 24.4x, a 20% premium to the peer group average of 20.3x. The
price-to-sales (P/S) ratio of 4.9x represents a 39.6% premium to the peer
group average of 3.51x. The company's strong business fundamentals justify the
premium.

About the Company

Pleasanton, California-based Thoratec is a leading developer of innovative
devices for advanced heart failure. Founded in 1976, the company has a market
capitalization of roughly $2.11 billion. Thoratec has strong presence in the
U.S. and Europe with a first mover advantage in the market it serves.

We currently have a long-term Outperform recommendation on Thoratec. Medical
devices stock carrying a Zacks #1 Rank are Merit Medical (Nasdaq:MMSI), Mesa
Laboratories (Nasdaq:MLAB) and Cantel Medical (NYSE:CMN).

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