The Zacks Analyst Blog Highlights:DryShips, St. Jude Medical, Cardica, Eagle Pharmaceuticals and Exactech
CHICAGO, May 22, 2014 /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 the DryShips, Inc. (Nasdaq:DRYS-Free Report), St. Jude Medical Inc. (NYSE:STJ-Free Report), Cardica Inc. (Nasdaq:CRDC-Free Report), Eagle Pharmaceuticals Inc. (Nasdaq:EGRX-Free Report) and Exactech Inc. (Nasdaq:EXAC-Free Report).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Wednesday's Analyst Blog:
Will DryShips Miss Earnings Estimates?
DryShips, Inc. (Nasdaq:DRYS-Free Report), a global diversified marine transporter, is slated to report its first-quarter 2014 financial numbers after the closing bell on May 22, 2014.
Last quarter, the company had delivered a 200.00% negative earnings surprise. Let's see how DryShips is positioned this time prior to the first-quarter announcement.
Factors to be Considered This Quarter
The drybulk shipping rates and ship values have improved considerably in recent times and management is expecting the trend to continue in 2014. The company's majority owned offshore oil drilling company, Ocean Rig UDW, is a major long-term catalyst. DryShips also boasts a well-diversified portfolio of drybulk vessels, oil tankers and offshore oil drilling units.
Meanwhile, the offshore drilling division continues to flourish buoyed by increasing expenditures from oil companies and success in ultra-deepwater oil field discoveries.
On the flip side, despite an improving U.S. macroeconomic scenario, the drybulk shipping industry is still not out of the woods. This is solely attributable to non-economic decisions taken by the shipping companies in 2008, just before the onset of recession worldwide.
The increase of vessels under operation resulted in intense price competition. Due to the lack of near-term foresight, most of the vessel operators had ordered large number of new build ships in several docks. This abundance of vessels resulted in severe cut-throat price competition.
Earnings Whispers?
Our proven model does not conclusively show that DryShips is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below.
Positive Zacks ESP: Earnings ESP represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate. This leads to a positive ESP of +500% for DryShips as the Most Accurate estimate stands at 12 cents while the Zacks Consensus Estimate is pegged much lower at 2 cents.
Zacks Rank: DryShips holds a Zacks Rank #4 (Sell) which decreases the predictive power of the stock.
We caution investors against this stock going into the earnings announcement, as a Zacks earnings ESP of +500% when combined with a Zacks Rank #4, lowers the possibility of an earnings surprise.
St. Jude Lowers Hospitalization 53%
St. Jude Medical Inc. (NYSE:STJ-Free Report) revealed another positive study results data presented at Heart Rhythm 2014 – the Heart Rhythm Society's Annual Scientific Sessions. The data revealed that the use of St. Jude's Medical Quartet Quadripolar LV lead lowered the number of hospitalizations by 53% compared to patients in the non-quadripolar group.
The lower hospitalization rate translated into a statistically significant 62% reduction in overall costs for both health care systems and patients. The data also showed that the patients using the St. Jude's quadripolar lead had a 98% probability of having lower costs than patients with non-quadripolar leads.
Following the breakout of this data, shares of the company climbed 1.4% till the last closing date.
The study focused on two types of hospitalizations – heart failure and LV lead surgical revision. It involved 198 patients over three years, implanted with either a St. Jude Medical Quartet Quadripolar LV lead or a non-quadripolar LV lead.
Recently, St. Jude Medical also revealed that according to data presented at Late Breaking Clinical Trial Session during Heart Rhythm 2014, patients adhering to St. Jude Medical Merlin Remote Monitoring System had more than twice (2.4x) the probability of survival than that of patients without remote monitoring.
The results of this study were derived from more than 260,000 patients implanted with either pacemakers or defibrillators. The observational study showed that greater adherence to remote monitoring enhances the well-being of patients and reduces mortality.
According to the study, patients with high adherence to remote monitoring had a 58% reduced likelihood of mortality than patients without using remote monitoring and a 35% reduced likelihood of mortality than patients with low remote monitoring. Although the results may vary according to geographic regions, socioeconomic factors were not associated with remote monitoring use.
St. Jude Medical posted a 4.3% rise in adjusted net earnings per share to 96 cents for the first quarter of 2014 from 92 cents a year-ago. With this, the company beat the Zacks Consensus Estimate by a penny and met its own guidance of 94 and 96 cents per share for the quarter.
Revenues grew about 2.0% to $1,363 million for the quarter, exceeding the Zacks Consensus Estimate of $1,355 million as well as the company's own guided range of 1,280 to $1,360 million. Unfavorable foreign currency translation reduced revenues by roughly $25 million.
For the second quarter of 2014, St. Jude Medical expects revenues in the range of $1,380 to $1,460 million while the company anticipates adjusted net earnings per share to lie between 99 cents and $1.01 for the quarter. The current Zacks Consensus Estimates for earnings per share and revenues for the quarter are pegged at $1.00 and $1,437 million.
For full year 2014, St. Jude Medical upgraded its revenues guidance to the range of $5,610 to $5,760 million from the prior range of $5,600 to $5,750 million. It also upgraded its adjusted earnings per share guidance to $3.95–$4.00 from the prior range of $3.94–$3.99. The current Zacks Consensus Estimates for earnings per share and revenues for the year are pegged at $3.98 and $5,702 million.
Currently, St. Jude retains a Zacks Rank #3 (Hold). Some better-ranked stocks in the medical products industry that are also worth considering include Cardica Inc. (Nasdaq:CRDC-Free Report), Eagle Pharmaceuticals Inc. (Nasdaq:EGRX-Free Report), and Exactech Inc. (Nasdaq:EXAC-Free Report). All of them retain a Zacks Rank #2 (Buy).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
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