Covidien and ResMed Coverage: Medical Instruments Stocks Show Healthy Trend

 Covidien and ResMed Coverage: Medical Instruments Stocks Show Healthy Trend

  PR Newswire

  LONDON, January 31, 2013

LONDON, January 31, 2013 /PRNewswire/ --

Healthcare stocks are making a comeback with healthy quarterly numbers. Major
Medical Instruments & Supplies companies such as Covidien Plc (NYSE: COV) and
ResMed Inc. (NYSE: RMD) not only beat consensus estimates but also provided
optimistic guidance. These companies are also showing a growing trend of
expanding in emerging markets in Asia. The sector is also seeing some
consolidation with the companies carrying out acquisitions to boost their
portfolio. StockCall free research report on Covidien and ResMed are available
now. Register now to view them at

Covidien Grows through Acquisitions

Covidien Plc reported good quarterly results and managed to beat consensus
estimates for revenue as well as net income. However, it also reported a 1.3
percent decline in its gross margin, which is a cause of concern. In
comparison to the previous year, its operating income also declined. However,
these metrics were higher than its previous quarter performance, thus showing
a sign of improvement. Sign up today to read the free and complete technical
analysis on Covidien at 

Covidien stock offered more than 20 percent return in the past 12 months. The
stock also comes with 1.64 percent dividend yield, which combined with healthy
capital appreciation makes Covidien an attractive stock to own. The stock is
keeping up its good run and has appreciated almost 10 percent on a
Year-to-Date basis. Covidien is looking to grow not only organically but also
through acquisitions. In the past year, the company carried out various
acquisitions including the acquisition of CV Ingenuity, to counter the
competition posed by Medtronic.

Covidien trades at Price/Earnings ratio of 16.12, making it a fairly priced
stock. However, it is likely to benefit from optimistic guidance provided by
the management. The company expects its revenue to grow by 5 to 8 percent in
fiscal 2013, while its earlier estimates were in the range of 3 to 6 percent.
While its Medical Devices and Pharmaceuticals divisions are performing well,
Covidien needs to spruce up is Medical Supplies unit to achieve more holistic

ResMed Offers Consistent Returns

ResMed Inc. [ Free Report on RMD ] ^[ ^1] hit a new 52-week high after
reporting healthy quarterly results. The stock grew about 50 percent in 2012.
The company reported higher margins for the quarter, while its sales grew 13
percent to touch $376.5 million figure. ResMed expects its current quarter
revenue to be at $381.1 million, thus showing healthy upward trend. While
ResMed already has a rather good 1.5 percent dividend yield, it is likely to
increase its dividends as it boosts its revenue. The company is looking to
augment its revenue by expanding into developing markets in Europe and Asia.

If good capital return along with dividend is not attractive enough then one
should look at the company's stock repurchase track record. ResMed bought back
$8 million worth of its stock in the last quarter. In fiscal 2013, it is
planning to buy a minimum of 2 million shares. The company's cash reserve is
consistently growing and its balance sheet is in solid position.

ResMed is looking beyond traditional markets and plans to expand in Asia and
Western Europe. In next five years, the company is planning to stress on its
R&D efforts to promote new products. The impact of these developments is
expected to be visible through its share price appreciation.


1.ResMed Inc. Technical Analysis [ ]

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