Five Biomedical Stocks Ripe For A Takeover

A handshake in the shadows

M&A activity has been slowing in the second half of the year.  But corporations continue to sit on tons of cash and they need to do something with it.

Jason Mills, Canaccord Genuity’s medical devices analyst, sees room for some consolidation in the biomedical devices sphere.

He handpicked five companies that are prime targets for a takeover.

AtriCure (NASDAQ: ATRC)

Why it's attractive:

  • leadership position in the surgical atrial fibrillation market
  • favourable new product and clinical trial pipeline
  • double-digit long-term growth

Source: Canaccord Genuity

HeartWare (NASDAQ: HTWR)

Why it's attractive:

  • attractive left ventricular assist devices growth in the near and long term
  • HTWR should achieve #1 OUS share in H2/11 and #1 worldwide share by 2015

Source: Canaccord Genuity

Spectranetics (NASDAQ: SPNC)

Why it's attractive:

  • the lead management business is worth the stock's current valuation on its own
  • high growth (>10%)
  • high barriers to entry
  • low penetration (<20%E)

Source: Canaccord Genuity

Thoratec (NASDAQ: THOR)

Why it's attractive:

  • leading LVAD player

Source: Canaccord Genuity

Volcano (NASDAQ: VOLC)

Why it's attractive:

  • favourable revenue growth
  • improving operating leverage
  • well-positioned globally in intra-vascular imaging
  • robust product pipeline

Source: Canaccord Genuity

Not all attractive stocks are M&A targets.

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