The Zacks Analyst Blog Highlights: Cisco Systems, CVS Caremark, ResMed,
Medical Action and MedAssets
CHICAGO, Feb. 14, 2013
CHICAGO, Feb. 14, 2013 /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 Cisco Systems (Nasdaq:CSCO), CVS
Caremark (NYSE:CVS), ResMed (NYSE:RMD), Medical Action (Nasdaq:MDCI) and
MedAssets Inc (Nasdaq:MDAS).
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Here are highlights from Wednesday's Analyst Blog:
Cisco Beats with Record Earnings, Revs
This current earnings season has not been much to write home about for stocks
in the Tech sector. But after the bell Wednesday, tech giant Cisco Systems
(Nasdaq:CSCO) handily beat EPS estimates, with earnings of 47 cents per share
(accounting for stock-based compensation) on revenues of $12.1 billion, which
was a tad better than, but mostly in-line with, expectations. These are both
all-time records for Cisco.
Cisco develops routers and switchers that make up the architecture of the
Internet. The company cited the coming together of its various growth
businesses -- cloud computing, mobile, data center, etc. -- as assisting this
impressive performance, especially in light of a difficult environment for
tech, in general. Reference the many big-time tech firms that missed
expectations in the quarter.
Posting a 9.3% positive earnings surprise means Cisco has now beaten
expectations for at least the past 5 quarters straight. It's Cisco's 8th
straight record revenue total, and net income in the quarter was $2.7 billion,
which was also above expectations.
Analysts were absolutely dormant in estimate revisions this quarter: 43 cents
per share was expected 90 days ago, and 43 cents was expected before the
earnings report. Cisco CEO John Chambers has been known to downplay guidance
estimates, which is a good way to consistently maintain positive earnings
surprises each quarter. Two analysts had revised upwards their estimates for
next quarter and fiscal 2013 in the past week, and it is largely for this
reason Cisco currently has a Zacks Rank #2.
CVS Broadens Pharmacy Advisor
CVS Caremark (NYSE:CVS) recently extended its innovative Pharmacy Advisor
program to cover five additional chronic conditions, namely asthma,
depression, osteoporosis, breast cancer and chronic obstructive pulmonary
These condition-based programs are an interventional measure to inform
pharmacists when patients are non-adherent to their medication regimen or have
suffered a gap in care. Prior to the extension, CVS's Pharmacy Advisor was
directed at diabetes and cardiovascular conditions, with more than 3.8 million
interventions to date.
CVS witnessed an additional uptake in Pharmacy Advisor program in 2012 and the
recent extension reflects its high success rate. The extension should further
drive adoption rates by increasing the number of lives covered under Pharmacy
Advisor. This is likely to increase the profitability of CVS going forward.
The Need for Pharmacy Advisor
According to estimates, medication non-adherence costs the U.S. economy up to
$300 billion annually. Studies reveal that low medication adherence is
associated with chronic conditions. Further, the incidence of medication
persistence (length of time a patient continues to take a prescribed drug) is
lower for individuals with chronic diseases.
As per the New England Healthcare Institute, medication adherence programs for
individuals can reduce healthcare costs and improve patient outcomes. Further,
a study published in the Health Affairs journal suggests that intervention by
pharmacists can reduce gaps in care. In light of these facts, the extension of
Pharmacy Advisor should improve medication adherence for chronic conditions
across the U.S.
The extension of the Pharmacy Advisor is the latest addition to CVS's several
near-term growth drivers. With a favorable selling season, its fourth-quarter
and annual results sailed past the corresponding Zacks Consensus Estimates.
The company's forecast for 2013 also encourages market sentiments.
Given this backdrop, the estimate revision trend for CVS reflects a bullish
sentiment. Consequently, the stock carries a Zacks Rank #2 (Buy). Besides CVS,
ResMed (NYSE:RMD), Medical Action (Nasdaq:MDCI) and MedAssets Inc
(Nasdaq:MDAS), carrying a Zacks Rank #1 (Strong Buy) are expected to do well.
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