Why Bruker (BRKR) is an Asset for Your Portfolio Post Q4
On Feb 11, 2016, we issued an updated research report on Massachusetts-based Bruker Corporation BRKR, which designs and manufactures proprietary life science and materials research systems and associated products.
Bruker exited 2015 on a positive note, with its fourth quarter financials squarely beating the Zacks Consensus Estimate. However, the top line failed to generate positive growth on a year-over-year basis, primarily due to unfavorable currency fluctuation. Nevertheless, the increased organic revenue growth driven by growth in CALID Group and the BEST segment raises optimism.
In the fourth quarter of 2015, the Bruker Nano Surfaces segment registered 1% organic growth in revenues as strength in its academic customer segment was offset by continued weakness from industrial and semiconductor and data storage customers. The AXS Division within the segment was a major savior, delivering high single-digit organic revenue growth in the quarter, driven by higher demand for its x-ray diffraction product. Management is overall confident of the long-term potential of Bruker’s technologies and products in semiconductor metrology.
We are currently looking forward to the company’s recently completed acquisition of Jordan Valley Semiconductors, which will enable it to offer unique solutions for advanced problems in nanotechnology research and semiconductor metrology. According to Bruker, with trends like increased connectivity and easy access to large amounts of data, new nanometrology needs are driving growth opportunities in advanced semiconductor nodes.
With respect to MALDI Biotyper, based on the recent developments, management believes Bruker is poised to double its microbiology business over the next four to five years.
Moreover, we encouragingly note that, in the second half of 2015, the company witnessed a positive rebound in its Nuclear Magnetic Resonance (NMR) revenues, from a significant bookings decline in 2014. As a result of this positive NMR performance, Bruker’s BioSpin group delivered strong organic revenue growth in the fourth quarter. In fact, in the reported quarter, BioSpin substantially completed the transfer of ultra-high field NMR magnet manufacturing from Rheinstetten plant in Germany, which is closed to the company’s remaining two magnet factories in France and Switzerland.
On the flip side, unfavorable foreign currency fluctuations continue to hinder Bruker’s growth trajectory. Evidently, changes in foreign exchange rates impacted Bruker’s revenues by 10.2% and earnings by 9 cents per share in 2015. In 2016, management expects currency to reduce revenues by 1.6%. In addition, currency fluctuations could cause the price of Bruker’s products to be less competitive than its principal competitors' offerings.
Currently, the stock carries a Zacks Rank #1 (Strong Buy).
Key Picks in the Sector
Some other medical stocks worth considering are Hill-Rom Holdings, Inc. HRC, OraSure Technologies, Inc. OSUR and Vascular Solutions Inc. VASC. All the three stocks sport the same Zacks Rank as Bruker.
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BRUKER CORP (BRKR): Free Stock Analysis Report
VASCULAR SOLUTN (VASC): Free Stock Analysis Report
ORASURE TECH (OSUR): Free Stock Analysis Report
HILL-ROM HLDGS (HRC): Free Stock Analysis Report
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