Market Overview

Analogic Earnings Preview: EPS Expected to Double

Analogic (NASDAQ: ALOG) is scheduled to report fiscal first-quarter 2012 results tomorrow, December 8, after the closing bell. The Massachusetts-based tech company is in transition, having last week announced the most comprehensive transformation of its corporate brand in its more than 40 year history. “Analogic has an incredibly bright and promising future,” Jim Green, president and CEO, promised in the announcement.

The consensus forecast of analysts calls for Analogic to report quarterly earnings of $0.43 per share, more than double from the same period of last year. And looking ahead to the current quarter, analysts so far anticipate sequential and year-over-year EPS growth. But note that Analogic's EPS fell short of consensus estimates in three of the past five quarters.

Analogic's revenue has now risen for three straight quarters. Analysts expect the company to report that revenues for the three months that ended in October increased 9.2% from a year ago to $113.4 million. And sequential and year-over-year growth in sales is predicted for the current quarter as well.

The Company

Headquartered in the Boston area, Analogic designs, manufactures, and sells systems and equipment for end users primarily in the health care and airport security markets worldwide. Its Medical Technology business consists of two segments, Medical Imaging and Ultrasound. Its Security Technology business includes checked bag and checkpoint products. The company was founded in 1967 and its market cap is now $688.1 million.

During the three months that ended in October, the company announced that it joined the newly formed Security Manufacturers Coalition. Analogic also settled an intellectual property dispute with Neurologica Corp. More recently, it announced the global branding initiative mentioned above.

Performance

Per-share earnings are expected to grow 15.0% over the next five years and the dividend yield is 0.7%. But the P/E and PEG ratios are higher than the industry average, and short interest in 5.7% of the float. Three out of six analysts recommend buying the stock; none consider it a sell. They have a mean price target of $59.25 per share, which is about 5% higher than the current share price.

The share price has jumped almost 7% in the past week and is once again nearing the 52-week high. And the 200-day and 50-day moving averages are approaching a golden cross. Over the past six months, the stock has outperformed competitors Analog Devices (NYSE: ADI) and Linear Technology (NASDAQ: LLTC), as well as the broader markets.

Action Items:

Bullish: Investors interested in exchange traded funds wiith a stake in Analogic might want to consider the following trades:

  • PowerShares Dynamic Healthcare (NYSE: PTH) is about 17% higher than a recent 52-week low.
  • iShares Dow Jones US Medical Devices (NYSE: IHI) is more than 9% higher than a recent 52-week low.
  • SPDR S&P Health Care Equipment (NYSE: XHE) is more than 8% higher than a recent 52-week low.

Bearish: Traders may want to consider these alternative positions in the same sector:

  • FEI Co. (NASDAQ: FEIC) is about 69% higher than a year ago.
  • Cepheid (NASDAQ: CPHD) is more than 52% higher than a year ago.
  • Cognex (NASDAQ: CGNX) is more than 25% higher than a year ago.

Neither Benzinga nor its staff recommend that you buy, sell, or hold any security. We do not offer investment advice, personalized or otherwise. Benzinga recommends that you conduct your own due diligence and consult a certified financial professional for personalized advice about your financial situation.

Posted-In: analog devices Analogic analyst forecastsEarnings Long Ideas Short Ideas Previews Trading Ideas

 

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