Symbol: PKI

Global Health Care Sector— Medical Devices and Equipment

Posted on by Raj Gupta

Some highlights from the report:

U.S.

  • Given the U.S. market is currently in a Confirmed Uptrend and the iShares U.S. Medical Device ETF ( IHI ) has regained its 50- and 200-DMA, we now recommend buying fundamentally sound Medical Technology ideas that have recently emerged from first- and second-stage bases.
  • Multiple ideas have reset their base counts after a severe December selloff. Our recommendation is to buy quality ideas that have recovered the quickest with relative strength lines at or near new highs.
  • Fundamental profiles remain intact and valuation and growth remain in line with historical medians. The current 70 profitable companies above $500M in market cap within the Medical Product and Equipment industry groups have five-year EPS median growth of 13% and a five-year median (high-to-low) P/E ratio range of 17 to 46. Over the next year, consensus calls for similar growth and valuation. Next fiscal year’s EPS is expected to grow a median of 13% with a P/E ratio of 24x.
  • U.S. Focus List ideas: Dexcom ( DXCM ), Edwards Lifesciences ( EW ), Intuitive Surgical ( ISRG ), Medpace ( MEDP ), and Wright Medical ( WMGI ). U.S. Stocks of Interest: Abiomed ( ABMD ), Boston Scientific ( BSX ), Genomic Health ( GHDX ), Illumina ( ILMN ), Omnicell ( OMCL ), and Staar Surgical ( STAA ).

EMEA

  • Health Care remains a long-term leading sector, and ideas have begun to surface over the last month. We recommend buying quality ideas that are emerging from early-stage bases.
  • European Focus List ideas: AFXX.DE, VITR.SE. Stocks of Interest: ELKB.SE, SRT3X.DE, STMN.CH.

APAC

  • The APAC region is beginning to improve technically following major corrections in key markets over the last year. Most ideas remain more than 20% off highs and are not ready to buy. We recommend a selective and patient approach, waiting for technical profiles to improve in fundamentally sound ideas before buying.
  • APAC Focus List idea: AS@H.JP. Stocks of Interest: NAN.AU, OLYC.JP.

WON Global View

Posted on by Anuj Kumar Chouhan

The U.S. market is in a Confirmed Uptrend. The S&P 500 and Nasdaq declined ~1% on volume greater than the prior day as each index picked up a distribution day in the process. Despite the sell-off, the majority of leading stocks pulled back in constructive fashion. To maintain a positive outlook, indices need to avoid a clustering of distribution days. Currently, the distribution day count remains low with only two days on the S&P 500 and one on the Nasdaq.

 

WON Global View

Posted on by Anuj Kumar Chouhan

The U.S. market is in a Confirmed Uptrend. The S&P 500 and Nasdaq pulled back off on below average volume and thus avoided a distribution day. Indices continue to face resistance along the 200-DMA, however, price action remains constructive.

WON Global View

Posted on by Anuj Kumar Chouhan

The U.S. market is in a Confirmed Uptrend. The S&P 500 and Nasdaq closed higher on below average volume and are sitting just below resistance at the 200-DMA (S&P 500: 2,741 (+0.1%); Nasdaq: 7,454 (+0.7%)). A low volume consolidation along the 200-DMA would be viewed as constructive as we would prefer to avoid any high-volume pullbacks off the 200-DMA.

WON Global View

Posted on by Anuj Kumar Chouhan

The U.S. market is in a Confirmed Uptrend. The S&P 500 and Nasdaq closed above their respective 100-DMA, and the next level of resistance is the 200-DMA (S&P 500: 2,741 (+0.9%); Nasdaq: 7,453 (+1.7%)). There remains little to no distribution and leading ideas continue to act well. We maintain our positive view on the general market.

WON Global View

Posted on by Anuj Kumar Chouhan

The U.S. market is in a Confirmed Uptrend. The S&P 500 and Nasdaq rallied strongly last week and are now sitting just below their respective 100-DMA (S&P 500: 2,710 (+0.2%); Nasdaq: 7,281 (+0.2%)). We expect consolidation around current levels given the sharp rally into this next level of moving-average resistance. Look for the major averages to avoid any clustering of distribution and for leading ideas to remain technically intact. The rising 21-DMA may serve as support should a pullback occur. The next level of resistance above the 100-DMA is the 200-DMA (S&P 500: 2,741 (+1.3%); Nasdaq: 7,453 (+2.5%)). We continue to recommend buying quality high-relative-strength ideas as they emerge from consolidation.

WON Global View

Posted on by Anuj Kumar Chouhan

The U.S. market is in a Confirmed Uptrend. The S&P 500 and Nasdaq rallied up to their respective 100-DMA (S&P 500: 2,712 (+0.3%); Nasdaq: 7,288 (+0.1%)), which is now serving as near-term resistance. Should the indices clear above this level, the 200-DMA will be the next level of major resistance.

Investment Strategy: Winners from Tax Overhaul

Posted on by Randy Watts

Key points:

  • We do not think the potential positive boost to earnings from the lower corporate tax rates from the tax overhaul are fully discounted in the U.S. equity markets.
  • Companies with businesses that are primarily domestic focused tend to have higher tax rates on average. Similarly, small cap stocks, which are generally more U.S. centric, could see strong earnings revisions if the Tax Bill passes.
  • Energy currently has the highest corporate tax rate and would see major relief. Technology, on the other hand, has the second lowest and would not have as large earnings revisions.
  • If the Tax Bill passes in its current form, Wall Street consensus is that S&P 500 earnings estimates may rise by as much as $10. That would take 2018 EPS from roughly $146 per share to $156 (+19% y/y).