The Bull Case on Edwards LifeSciences

Edwards LifeSciences (EW) is an interesting small/mid cap play in this market. First off, the company provides products and technologies designed to treat cardiovascular diseases. It focuses primarily on heart valve disease, peripheral vascular disease, and critical care technologies.

On April 22, the company raised its full-year sales and earnings guidance, citing strength in each of its product lines and reaping benefits from a weak dollar. The company expects profit between $2.45 and $2.53, a 13 cents-per-share increase in the range. Sales are expected to range from $1.21 billion to $1.26 billion, a $50 million boost. Analysts expect 2008 profit of $2.35 per share on revenue of $1.18 billion.

As a result of this great news, all 13 covering analysts lifted their forecasts for the current year. Earnings estimates stand at $2.49 per share, up 14 cents from a month ago.

We at The Correct Call think that this stock could appeal to a wide array of investors. Growth investors have plenty to chew on as medical technology is relatively recession-proof. Additionally, this company is on the cutting edge of new technology. We believe estimates have further to go on the upside.

Also, more conservative investors will like the stability that comes from dependable earnings growth in good and bad economic times alike.

The stock is trading at about 19x next year’s estimates, which are likely to be revised even higher. This is certainly reasonable for a growth company with upward momentum. The Correct Call sees this stock north of $65 within a year.

Disclosure: None

Comments

[DanielJacome]

nice pick

barrons wrote it up today

online.barrons.com/art...