Covidien PLC Stock Buy Recommendation Reiterated (COV)
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- The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- Despite its growing revenue, the company underperformed as compared with the industry average of 8.6%. Since the same quarter one year prior, revenues slightly increased by 5.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- COVIDIEN PLC reported flat earnings per share in the most recent quarter. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, COVIDIEN PLC increased its bottom line by earning $3.92 versus $3.78 in the prior year. This year, the market expects an improvement in earnings ($4.48 versus $3.92).
- The gross profit margin for COVIDIEN PLC is rather high; currently it is at 62.80%. Regardless of COV's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, COV's net profit margin of 16.13% compares favorably to the industry average.
--Written by a member of TheStreet Ratings Staff. It's Official: Action Alerts PLUS beats the S&P 500 with Dividends Reinvested! Cramer and Link were up 16.72% in 2012. Were you? See what they are trading for 14-days FREE
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