Small cap medical product stock Invacare Corporation (NYSE: IVC) and biotech stock Neurocrine Biosciences (NASDAQ: NBIX) and mid cap dental stock Sirona Dental Systems (NASDAQ: SIRO) are all scheduled to report earnings before the market opens on Friday. All three earnings reports could be interesting as Invacare Corporation is working on turning things around and Neurocrine Biosciences swung into a loss the last earnings season while Sirona Dental Systems reported solid sales and earnings the last time around thanks to rising order. So what should be your trading and investing strategy with these two small caps and one mid cap? Here is a closer look:
Invacare Corporation (NYSE: IVC) Is Working on a Turnaround
Invacare Corporation is the global leader in the manufacture and distribution of innovative home and long-term care medical products that promote recovery and active lifestyles. Back in January, Invacare Corporation announced it had completed the sale of its medical supplies business to AssuraMed for an estimated net proceeds of $146.6 million. The divestiture is part of Invacare Corporation’s globalization strategy to focus on its core equipment product lines with the proceeds to be used for pay down debt and to accelerate new product development with selective acquisitions. However, Invacare Corporation has been hit with several internal and external challenges which have impacted sales and margins plus have delayed new products – especially those with higher margins. These challenges had forced Invacare Corporation to cease most new product development up until the time of its last earnings report as its engineers have been forced to focus on remediation and quality improvements to satisfy the FDA. On Tuesday, Invacare Corporation rose 0.83% to $15.8 (IVC has a 52 week trading range of $12.87 to $18.27 a share) for a market cap of $504.55 million plus the stock is down 11.2% over the past year and down 34% over the past five years. Invacare Corporation is also going into earnings with no trailing P/E and a forward P/E of 13.74.
Neurocrine Biosciences (NASDAQ: NBIX) Swung Into Loss Last Earnings Season
Neurocrine Biosciences is a biopharmaceutical company focused on neurological and endocrine diseases and disorders with product candidates addressing some of the largest pharmaceutical markets in the world, including endometriosis, tardive dyskinesia, uterine fibroids, stress-related disorders, pain, diabetes, insomnia, and other neurological and endocrine-related diseases and disorders. On Tuesday, Neurocrine Biosciences rose 12.29% to $10.51 (NBIX has a 52 week trading range of $6.25 to $10.76 a share) for a market cap of $697.7 million on no apparent news (the stock is up 10.9% over the past year and up 90.7% over the past five years). Back in October, Neurocrine Biosciences would have posted a 77% revenue fall to $9.4 million from $41.6 million had it not been for a $30 million payment from Abbott Laboratories (NYSE: ABT) for development work on Elagolix (an experimental treatment for endometriosis) along with a $3 million loss namely due to payments for drug development dramatically declining. Apparently though, significant progress has been made on Elagolix. Nevertheless, Wall Street will probably be paying close attention to whatever Neurocrine Biosciences reports on Friday and its rather interesting that the stock mad a big gain yesterday.
Sirona Dental Systems (NASDAQ: SIRO) Reported A Pickup in Sales the Last Time it Reported Earnings
Sirona Dental Systems has served dealers and dentists worldwide for more than 130 years by developing, manufacturing, and marketing a complete line of dental products, including CAD/CAM restoration systems (CEREC), digital intra-oral, panoramic and 3D imaging systems, dental treatment centers and handpieces. Sirona Dental Systems has recently been hit by announcements of “investigations” by “shareholder rights” law firms “for potential breaches of fiduciary duties in connection with their conduct in seeking shareholders’ approval for an advisory vote on compensation of the Company’s named executive officers.” I am not sure what that means – other than some lawyers want to make some money. After all and the last time Sirona Dental Systems reported earnings, shares made a double digit gain after a 13% revenue increase to $247.4 million thanks to a pick up in US and Asian orders in particular while net income surged from $13.8 million to $34.7 million. Sirona Dental Systems also announced that its CEO and Chairman will retire with the current president succeeding him. On Tuesday, Sirona Dental Systems rose 1.58% to $68.8 (SIRO has a 52 week trading range of $40.59 to $68.83 a share) for a market cap of $3.78 billion plus the stock is up 43.5% over the past year and up 138.1% over the past five years. Sirona Dental Systems will also be going into earnings with a trailing P/E of 29.16 and a forward P/E of 18.02.
The Bottom Line. I am not so sure any risk adverse investor would be interested in Neurocrine Biosciences but Invacare Corporation looks like its turning things around while Sirona Dental Systems is looking pretty solid.