The Checkup
A year ago in “Across the Street” we spoke with Eric Yoon, manager of Fidelity Select Medical Equipment (FSMEX), who gave us two picks benefiting from an aging population here and abroad. Here’s how they’ve fared:
Covidien (NYSE: COV), a maker of surgical equipment, is spinning off its pharmaceutical business at the end June, a move that will allow the company to compete more aggressively in the medical device segment.
Sales were up 5 percent, to $3.1 billion, for the second quarter of fiscal 2013, ended in March. But profits fell 12 percent, to $0.92 per share, due to higher excise taxes on medical devices and costs related to the spinoff.
For fiscal 2013, ending this September, Covidien is expected to earn $4.45 per share, up 3 percent. The stock was recently priced at just over 14 times 2013 earnings estimates, with a dividend yield of 1.6 percent.
Shares of Covidien, recently at $64, are up 29 percent from a year ago.
The Cooper Companies’ (NYSE: COO) two main divisions— contact lenses and surgery products— are growing smartly. Lenses, including the popular Biofinity line, are benefiting from rising sales in Asia and more demand for bifocal lenses here in the US.
In July 2012, CooperSurgical bought Origio, the largest maker of non-pharmaceutical fertility products, with a 35 percent global market share.
For fiscal 2013, ending this October, analysts estimate earnings will increase 16 percent to $6.05 a share.
Recently priced at $109, Cooper has returned 32 percent since last year.
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