Trinity Biotech - Momentum
August 02 2012 - 8:00PM
Zacks
Trinity Biotech plc (TRIB), which has delivered eight
positive earnings surprises in the last ten quarters, is currently
hovering around its 52-week high of $12.76 hit on July 16. ADRs of
this Ireland-based diagnostic test kits and instrument company have
been moving mostly upward since mid-June based on second-quarter
results, a growth-oriented guidance and a 50% dividend.
With a year-to-date return of more than 26% and an attractive
valuation, this Zacks #1 Rank (Strong Buy) stock looks like a solid
momentum pick.
Second-Quarter Earnings
On July 12, Trinity Biotech reported second-quarter earnings of
19 cents per ADR, which were in line with the Zacks Consensus
Estimate and up 11% from last year. Total revenues climbed 7% to
$20.8 million, driven by impressive sales in both the clinical
laboratory and point-of-care divisions. The Zacks Consensus
Estimate, however, was $21.0 million.
Clinical laboratory revenues climbed 7.2% to $16.4 million,
while revenues from the point-of-care unit climbed 6.1% to $4.4
million.
Trinity Biotech repurchased more than 175,000 ADRs during the
second quarter of 2012 at an average cost of $11.49 per ADR. The
company’s most recent dividend of 15 cents per ADR jumped 50% from
that paid in 2011.
Guidance Reflects Growth
The company expects to generate earnings of at least 80 cents
per ADR in 2012 on revenues of $86.0 million. This marks gains of
10.1% in earnings and 10.4% in revenues from 2011.
Earnings Momentum on the Upswing
The Zacks Consensus Estimate for 2012 rose 3.9% to 79 cents per
ADR over the last 60 days. For 2013, the Zacks Consensus Estimate
is pegged at 91 cents per ADR, up 8.3% over the same time
frame.
The Zacks Consensus Estimate for 2012 reflects a year-over-year
improvement of about 13.3%, while 2013 indicates a year-over-year
jump of 15.1%.
Valuation Looks Attractive Trinity Biotech’s valuation looks
attractive. The company currently trades at a forward P/E of 15.9x,
reflecting a huge discount of 60.5% to the peer group average of
40.2x. Also, on a price-to-book basis, ADRs currently trade at
1.7x, a 52.8% discount to its peer group average of 3.6x.
Strong Chart
ADRs of Trinity Biotech have displayed an upward trend since
mid-June, barring minor hiccups. The chart reveals that the stock
has been consistently trading above its 200-day and 50-day moving
average since early March.
Volume is fairly strong, averaging roughly 66K daily. Trinity
Biotech has constantly outperformed the S&P 500 since the
latter half of April 2012. The year-to-date return for the stock is
approximately 26.2%, compared with the S&P 500’s return of
7.7%.
Headquartered in Bray, Ireland and founded in 1992, Trinity
Biotech focuses on developing, acquiring, manufacturing and
marketing medical diagnostic products. The company, which has a
market cap of $268.21 million, serves the clinical laboratory and
point-of-care divisions of the diagnostic market. The products are
used for the detection of infectious, autoimmune and sexually
transmitted diseases apart from diabetes and deficiencies related
to the liver and intestine. Furthermore, Trinity Biotech provides
raw materials to the life sciences industry. The company, which
operates in more than 75 countries across the globe, sells its
products through its own sales force in the US, UK, Germany and
France. Moreover, it operates through a network of international
distributors and strategic partners.
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