Covidien PLC Stock Buy Recommendation Reiterated (COV)
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- The revenue growth came in higher than the industry average of 23.1%. 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.
- 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.
- 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, the net profit margin of 16.13% trails the industry average.
--Written by a member of TheStreet Ratings Staff. Exclusive Offer: Jim Cramer's 'go-to' small/mid-cap guru Bryan Ashenberg only buys stocks he thinks could return 50-100%. See his top picks for 14-days FREE.
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