For Immediate Release
Chicago, IL – May 15, 2013 – 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, Inc. (CSCO), Athenahealth, Inc. (ATHN), Bank of America Corporation (BAC), Cerner Corporation (CERN) and Merge Healthcare Incorporated (MRGE).
Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513
Here are highlights from Tuesday’s Analyst Blog:
What’s In Store for Cisco’s Earnings?
Cisco Systems, Inc. (CSCO) is set to report third quarter 2013 results on May 15. Last quarter it posted a 9% positive surprise. Let’s see how things are shaping up for this announcement.
Growth Factors This Past Quarter
Though Cisco was affected by the sluggish macro environment, the company’s sales growth rates in the second quarter were above the year-ago comparable period and better than management guidance, attributable to the ramp of several important products and strength in the Data Center, Switching and Wireless lines of business. Order growth was quite encouraging and the trend is reflective of Cisco’s superior strategy and innovation.
However, margin expansion was limited due to an unfavorable mix and increased expenditure on new products.
The company’s restructuring activities to expand its operations in certain strategic areas including cloud computing and the pursuance of growth opportunities in international markets could be potential catalysts going forward. However, we believe that the intense competition in the company's core businesses of routers and switches remains a matter of concern.
Our proven model does not conclusively show that Cisco will beat earnings estimates this quarter. That is because a stock needs to have both a positive Earnings ESP (Read: Zacks Earnings ESP: A Better Method)and a Zacks Rank #1, #2 or #3 for this to happen. That is not the case here as you will see below.
Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate stand at 45 cents. Hence, the difference is 0.00%.
Zacks Rank #4 (Sell): We caution against stocks with Zacks Ranks #4 and #5 (Sell rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
Athenahealth Purchases Landmark Property
Leading vendor of cloud-based services for physician practices and inpatient settings, Athenahealth, Inc. (ATHN) recently reported that it has concluded the purchase of the Watertown 'Arsenal on the Charles' from Harvard University. The Arsenal on the Charles is a large multiple building business property spread across 29 acres. It is situated just 10 miles from Boston.
The Arsenal on the Charles is recognized as a historical site. It has 11 buildings first built over 200 years ago. The complex has served as the company headquarters since 2005.
The deal is valued at $168.5 million. The property will ensure that the company has the ability to grow in the health care business.
ATHN used a fresh $325 million senior bank facility of five years duration to fund its purchase of the Arsenal on the Charles. It comprised of $125 million of unsecured revolving credit and $200 million term loan availability. The latest credit arrangement will take the place of Athenahealth’s present revolving credit arrangement. One of the joint main arrangers was Bank of America Corporation (BAC).
Athenahealth’s web-based deployment provides a low-cost scalable service while its flexible rules engine leads to higher efficiency in claims settlement. The Software-as-a-Service (SaaS)-based approach allows for a more flexible delivery mechanism that helps Athenahealth win deals. The company has traditionally enjoyed high customer satisfaction rates, which facilitates a larger number of referrals.
Athenahealth’s unique business model makes it a strong provider of RCM services (athenaCollector) designed for small physician practices. Its EHR product (athenaClinicals) is a key player in ambulatory settings. We believe that sales of athenaClinicals are likely to remain robust. In addition, the company will harness its newer products, namely athenaCommunicator and athenaCoordinator.
Athenahealth should benefit from its extensive athenaCollector client base, as only a minority of its subscriber base also utilizes athenaClinicals. Cross selling represents a real growth opportunity in the near term. In this regard, Athenahealth has made rapid strides in capturing the EHR business of physician practices. However, this segment is shrinking, as hospitals increasingly absorb physician’s medical practices.
Athenahealth is geared to establish itself in the enterprise segment. The company has recently signed on, and executed several enterprise-sized deals, which provide it with a credible and referenceable client base. In Mar 2013, Athenahealth completed the takeover of Epocrates, a provider of point-of-care digital solutions in the healthcare industry. The acquisition will enable Athenahealth to increase its user network and improve its brand awareness.
Though fresh opportunities are shrinking, the replacement market has been growing. Competition is fierce and larger competitors may benefit from the incumbency factor. Industry stalwarts such as Cerner Corporation (CERN) offer long-standing seamless products which integrate inpatient and ambulatory-care systems.
We currently have a Zacks Rank #3 (Hold) on the company. However, we are more positive about other stocks such as Merge Healthcare Incorporated (MRGE) which carries a Zacks Rank #2 (Buy) and is expected to do well.
Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leon Zacks. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.
Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Follow us on Twitter: https://twitter.com/zacksresearch
Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.
Zacks Investment Research
800-767-3771 ext. 9339
More From Zacks.com