Quintiles IMS Holdings (Q) Holds Secondary Offering (revised)

Leading provider of product development and integrated healthcare services, Quintiles IMS Holdings, Inc. (NYSE:Q) held a secondary offering of 10.6m shares, of which they repurchased $300m worth.

Stock Performance

In the last three months, Quintiles’ shares have increased roughly 11.57% against the Zacks categorized Medical Services’ sub-industry’s loss of 2.58%. The current level is higher than the S&P 500’s return of 3.31% over the same time frame. Finally, a long-term expected earnings growth rate of 13.02% instills confidence in investors.

The estimate revision for the stock has been unfavorable. The current quarter has seen seven estimates move south over the last month compared with one movement in the opposite direction. As a result, earnings estimates for the current quarter have declined 4 cents to $1.05 over the same period. Quintiles’ carries a Zacks Rank #3 (Hold).

The transaction is expected to close on May 31, 2017, subject to customary closing conditions. The company expects to fund the repurchase with cash on hand and borrowings from its revolving credit facility. As of Mar 31, 2017, the company had $862 million of cash and cash equivalents in its books.

Looking forward, we believe inorganic expansion has acted as a major catalyst for the company. The strategic alliance with DaVita Clinical Research, a wholly owned subsidiary of DaVita HealthCare, is a notable development. From this transaction, Quintiles is expected to gain nephrology expertise and enhance its global delivery capabilities, which will fortify its position in the field of clinical research. The company has 30 years of experience in the field of clinical trial research, especially in therapeutics.

The launch of Continuous Glucose Monitoring service is a major growth driver for Quintiles. Notably, the solution offers innovative and wearable technology for diabetes-focused clinical trials, which is highly exclusive in the market. In this regard, a report by Markets and Markets forecasts that the global market for glucose, dextrose and maltodextrin is projected to reach a worth of $42.20 billion by 2021 at a CAGR of 6.7%.

Key Picks

Better-ranked stocks in the broader medical sector include Luminex Corporation (NASDAQ:LMNX) , Edwards Lifesciences Corp. (NYSE:EW) and Inogen Inc (NASDAQ:INGN) . Inogen and Luminex sport a Zacks Rank #1 (Strong Buy), while Edwards Lifesciences carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Inogen projects a long-term adjusted earnings growth of almost 17.5%. The stock returned 77.8% over the last one year.

Luminex has an expected long-term adjusted earnings growth of almost 16.3%. The stock added roughly 7.1% over the last three months.

Edwards Lifesciences has a long-term expected earnings growth rate of 15.6%. The stock has a solid one-year return of roughly 13.6%.

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(We are reissuing this article to correct a mistake. The original article, issued May 30, 2017, should no longer be relied upon.)