NuVasive (NUVA) At 52-Week High On Strategic Initiatives

Shares of NuVasive, Inc. (NASDAQ:NUVA) rallied to a new 52-week high of $60.37 on Jul 1, closing a bit lower at $59.97. This represents a strong one-year return of about 26.28%, much better than the S&P 500’s 1.65%.

Currently, NuVasive carries a Zacks Rank #1 (Strong Buy). The stock has a market cap of $2.99 billion and an impressive long-term expected earnings growth rate of 14.76%.

Notably, the company has strong investments in key international markets, solid capital placement and strategic acquisitions.

Looking at the current uptrend, we assume that the market is extremely bullish about NuVasive’s recently entered agreement to acquire Biotronic NeuroNetwork for $98 million in cash. The deal, once closed, will not only boost NuVasive’s spine service business but will also solidify its presence across the U.S. and international markets. Moreover, this transaction is expected to be immediately accretive to its adjusted EPS in 2016 and beyond. This transaction will also help the company achieve its 2016 adjusted margin target of 15.8% with growth in revenue over the long haul.

Meanwhile, we are also looking forward to NuVasive’s latest launch of five new surgical solutions at the 84th American Association of Neurological Surgeons (AANS), advancing its lumbar and cervical spine surgery portfolio.

The company had also announced the U.S. launch of AttraX Putty, a next generation, synthetic bone graft product for use as an autograft extender in posterolateral spine surgery. This addition will further boost the company’s biologics portfolio.

Moreover, the company completed two major acquisitions – Ellipse Technologies and Mega Surgical. The takeovers are expected to boost NuVasive’s revenues by an approximate 14% from 2015 levels.

Meanwhile, in a bid to expand in the growing spine market, NuVasive launched several products last year and have still maintained the trend in 2016 as well. The company’s newly-acquired MAGEC and PRECICE technologies have fortified its international presence, resulting in an operating profit margin expansion of 150 basis points.

The company also has contributions from core direct market including Japan, Australia, New Zealand, the U.K., Italy and Germany, which resulted in business growth of a strong 20.7% at CER. Currently, Nuvasive expects its international business to grow by 38% in 2016, at CER.

Key Picks

Another stock in the sector carrying the same Zacks Rank as NuVasive is GW Pharmaceuticals plc (NASDAQ:GWPH) . Meanwhile, Boston Scientific Corporation (NYSE:BSX) and ICU Medical, Inc. (NASDAQ:ICUI) are other favorably ranked stocks with a Zacks Rank #2 (Buy).