Last year, ENTrigue entered into a collaboration with Fiagon GmbH, a company based in Germany, that develops and manufactures highly portable navigation systems for ENT, oral and maxillofacial surgery. Under the collaboration, ENTrigue and Fiagon will search for the integrated navigation and therapy solutions for ENT procedures beginning from ENTrigue’s Ventera Sinus Dilation System in Europe.
This acquisition is expected to show its positive effects in the full fiscal year 2014, with the sales estimates to be higher at 3.7% compared to 2.4% in 2013. The analysts’ have estimated the EPS of ArthroCare to rise to 1.57 in the 2013, compared to 1.25 in 2012, an increase of of 25.6%.
Smith & Nephew plc (ADR) (NYSE:SNN) develops manufactures and sells advanced surgical devices in advanced wound management sectors worldwide. Last month, the company announced that its Advanced Wound Management division and United Drug Medical were entering a strategic partnership to support and endorse the IV3000 range of cannula dressings in the UK.
Stryker Corporation (NYSE:SYK), a leading medical technology company, provides reconstructive, medical and surgical, and neurotechnology and spine products. In the current fiscal year, the company received a warning letter from FDA relating to the quality system observations made during the inspection. It blamed Stryker for failing to notify FDA of a product recall, and for marketing devices, including the Neptune Waste Management System, without a required 510(k) clearance.
Final thoughts
ArthroCare is expected to benefit from its acquisition of ENTrigue and is likely to show significant growth in its earnings as the research activity and collaboration agreements materialize. The company is a strong buy, to be held for a few years, as currently the ENT industry is in its high growth phase and can give high returns.
Smith also has bright future prospects as the company is undergoing strategic collaborations to enhance its market share in the UK. The company is recommended for investors who prefer a regular stream of income as the company is increasing its dividend yield year-on-year.
Stryker is not recommended as it has been receiving FDA warnings in 2013. This may give rise to penalties. Also, the company offers a lower dividend yield compared to Smith.
The article ArthroCare: A Stronger Company Now originally appeared on Fool.com and is written by Awais Iqbal.
Awais Iqbal has no position in any stocks mentioned. The Motley Fool recommends Johnson & Johnson. The Motley Fool owns shares of Johnson & Johnson. Awais is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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