Photronics, Kronos Worldwide, OmniComm Systems, Streamline Health Solutions and Merge Healthcare highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – October 12, 2015– Zacks Equity Research highlights Photronics ( PLAB) as the Bull of the Day and Kronos Worldwide (KRO) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on OmniComm Systems Inc. (OMCM), Streamline Health Solutions, Inc. (STRM) and Merge Healthcare Inc. ( MRGE).
Here is a synopsis of all five stocks:
Bull of the Day:
Photronics (PLAB) delivered the coveted "triple play" back in August: a positive earnings surprise, a positive sales surprise, and management guidance above consensus. Analysts lifted their estimates higher for both this year and next year after the report, sending the stock to a Zacks Rank #1 (Strong Buy).
The valuation picture looks very reasonable for Photronics too with shares trading at less than 13x forward earnings and just 1x tangible book value.
Photronics manufactures photomasks, which are high precision quartz plates that contain microscopic images of electronic circuits. They are a key element in the manufacture of semiconductors and flat panel displays.
Third Quarter Results
Photronics delivered strong third quarter results on August 18. Earnings per share came in at $0.17, beating the Zacks Consensus Estimate of $0.12. It was a 143% increase over the same quarter last year.
Sales rose 5% to $131.7 million, ahead of the consensus of $131.0 million. This was driven by strength in high-end flat panel display and increased demand for AMOLED photomasks.
Sales of semiconductor photomasks totaled 79% of revenues in the quarter while sales of flat panel display photomasks accounted for the other 21%.
The company also delivered significant profit margin expansion thanks to continuously improving manufacturing efficiencies. Operating income surged 68% year-over-year as the operating margin expanded from 8.9% to 14.1% of sales.
Bear of the Day :
Earnings estimates have fallen sharply for Kronos Worldwide (KRO) after the company delivered disappointing second quarter results on August 7. The drop in consensus estimates was large enough to send the stock to a Zacks Rank #5 (Strong Sell), placing it in the bottom 5% of all stocks that Zacks ranks.
While shares have been beaten up this year, the stock does not look cheap at more than 20x forward earnings.
Kronos Worldwide manufactures titanium oxide pigments. TiO2 is a fine white powder used in products like paints, plastics and paper to give them maximum whiteness and opacity.
Approximately half of its sales volume was into European markets in the first half of 2015.
Disappointing Second Quarter Results
Kronos reported disappointing second quarter results on August 7. Adjusted earnings per share came in at -$0.08, well below the Zacks Consensus Estimate of +$0.23. It was also down from EPS of +$0.29 in the same quarter last year.
Net sales plunged 19% to $360.2 million, missing the consensus of $396.0 million. This was driven in large part by a 13% drop in its average TiO2 selling prices, due in part by competitive pressures. The company also faced significant foreign currency headwinds in the quarter. These factors were partially offset by higher sales volumes.
Additional content:
Stay Hale & Hearty: 3 Stock Picks in Healthcare IT
"It ' s big dollars going into health-care IT… I think it ' s going to be a long bull run," says Steve Kraus of Bessemer Venture Partners.
With an entire generation of people ecstatic about the latest Internet of Things (IoT) platform and the transition into cloud computing, keeping healthcare, the most protuberant part of our daily routine aside will be utter foolishness.
In an era of digital revolution, all devices are going the ‘smart’ way. Health benefits too are merely a click away. The latest health apps and technological devices connect patients seamlessly with their care givers so as to provide the latter with instant access to patient information.
Technological evolution facilitates increased and smooth access of healthcare services for both patients and doctors across the care continuum. Companies in the Healthcare-IT space are thus leaving no stone unturned to capitalize on the opportunities in this era of data explosion. Greater accessibility of medical services at reduced overall cost, made possible by the digital platform, is the call of the hour.
Hence, it’s time investors wake up to the reality of IoT and cash in on this ongoing revolution within healthcare IT. This highly lucrative Healthcare-IT industry, also known as Medical Info Systems, currently sports a decent Zacks Industry Rank of #77 out of 265 (as a guideline, the outlook for industries with Zacks Industry Rank #88 and lower is Positive; learn more about Zacks Industry Rank). Impressively, this industry belongs to the top 29% of the Zacks Rank Industries.
The Uptrend
With time, healthcare has proved itself as one of the most progressive industries, transforming itself consistently vis-à-vis the shifting trends of the global order. With Internet and smart devices playing an indispensable role in our daily lives, healthcare could not be left behind. No wonder, companies in this space are fast jumping on the digital bandwagon.
With population on the rise and lives becoming busier, the availability of convenient, personalized healthcare facilities, via the virtual platform, is essentially the need of the hour. Thanks to rapid advances witnessed in cloud computing and mobile apps, healthcare organizations are now keen to remodel themselves as data-intensive care providers. According to a recently released report by Accenture, 41% of health executives suggest that the data volume their organizations manage has grown over 50% in the last year.
Thus, in the wake of the vast market potential that the Healthcare IT industry has to offer to its players, we recommend investors to take a look at the top-performing stocks in this industry.
Stocks to Pick
From among the wide gamut of stocks in the Medical Info Systems space, we hereby select three top-performing stocks for you, that carry a healthy Zacks Rank #1 (Strong Buy) or 2 (Buy).
OmniComm Systems Inc. (OMCM): OmniComm is a leading provider of strategic software solutions to pharmaceutical, biotechnology, research and medical device organizations that conduct life changing clinical trial research. So far, OmniComm has supported over 4,000 trials in all phases of clinical development in over 30 therapeutic areas across 55 countries. We believe, an innovative product line, designed to facilitate convenient and smooth clinical trial operations, will allow the company to further expand its customer network.
On Sep 22, 2015, OmniComm entered into a five-year agreement with a leading contract research organization (CRO), worth multi-million dollars. This deal will allow the CRO to use OmniComm’s unique TrialMaster electronic data capture technology (EDC). With one of the top 5 CROs now on its client list, OmniComm is closely focused on increasing its revenue growth. Management expects the revenue increment to be reflected in the remainder of fiscal 2015 results.
Add this desirable stock to your portfolio as it boasts a Zacks Rank #2 and witnessed a solid rise of 12.5% in the last two years. The expected earnings growth of 150% for the current year compares favorably with the industry average of a mere 27.8%.
Streamline Health Solutions, Inc. (STRM): Streamline Health is a leader in transformational data-driven solutions in healthcare. The company’s unique Looking Glass platform facilitates capturing, aggregating and translating enterprise data into knowledge – actionable insights that reduce exposure to risk, enhance operational performance and improve patient care. On Aug 25, 2015, Streamline Health announced that for the second year in a row, its Looking Glass Enterprise Content Management solution has been ranked one in the category of financial management/content management solutions under a Black Book Rankings survey.
The company’s recent quarterly performance has also exceeded expectations. On Sep 3, 2015, Streamline Health posted second-quarter 2015 loss of 5 cents per share, narrower than the Zacks Consensus Estimate by 58.3%. Revenues of $9 million also beat the mark by 20.6%. Investors appear to be reasonably upbeat about Streamline Health, as evident from the 10.5% rise in its share price that followed its earnings release.
A Zacks Rank #1 makes this stock a great choice for your portfolio. Further the expected earnings growth of 45.1% for the current year compares favorably with the industry average of 27.8%.
Merge Healthcare Inc. (MRGE): Merge Healthcare, a developer of healthcare information software solutions, offers enterprise imaging solutions for radiology, cardiology, orthopedics and eye care; a range of products for clinical trials; and financial and pre-surgical management software and applications. According to Frost and Sullivan and Merge’s research report, the global market for imaging software and services, healthcare IT interoperability solutions and electronic health records (EHR) solutions for radiology, cardiology, ophthalmology and orthopedics is worth $7.5 billion annually.
On Aug 6, 2015, renowned IT giant IBM Corp. announced its plan to take over Merge for $1 billion. Although no definitive approval has yet been disclosed at Merge’s end, if this acquisition takes place, the combined company will likely bring in a revolutionary transformation in the healthcare-IT industry by expanding the realm of cognitive computing, population health, and cloud-based healthcare intelligence. Investors also seem inquisitive about this deal, as is evident from the 31% surge in Merge’s share price that immediately followed the news release.
Merge has raised an impressive 158.9% in the last two years and its Zacks Rank #2 implies that the stock still has huge upside potential. The projected sales growth of 18.6% for the current year compares favorably with the industry average of 12.6%.
The Bottom Line
The global Healthcare-IT market is expected to reach a value of $228.8 billion by 2020, growing at a CAGR of 13.4%. So, why not take advantage of this potentially big money-making opportunity? We suggest you to add the aforementioned stocks in your portfolio to make the most of it.
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PHOTRONICS INC (PLAB): Free Stock Analysis Report
KRONOS WORLDWD (KRO): Free Stock Analysis Report
OMNICOMM SYSTEM (OMCM): Free Stock Analysis Report
STREAMLINE HLTH (STRM): Free Stock Analysis Report
MERGE HEALTHCAR (MRGE): Free Stock Analysis Report
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